Law suspended to ‘further study’ IRR — Palace
BY WENDELL VIGILIA and JOCELYN MONTEMAYOR
REP. France Castro (PL, ACT) yesterday said it would be better if President Marcos Jr. would just “scrap the whole Maharlika law rather than just suspend it.”
Castro, a member of the Makabayan bloc, said the suspension of the law’s implementation “shows that the measure was rushed and flawed in so many levels.”
Executive Secretary Lucas Bersamin, by authority of the President, has issued a memorandum dated October 12, 2023, directing Bureau of Treasury officer-in-charge Sharon Almanza, Land Bank of the Philippines (Landbank) president and chief executive officer Lynette Ortiz, and Development Bank of the Philippines (DBP) president and chief of executive officer Michael De Jesus to suspend the implementation of Republic Act 11954 (RA 11954), or the Maharlika Investment Fund Act of 2023.
Bersamin said the President ordered the suspension “because he wanted to study carefully the IRR (implementing rules and regulations) to ensure that the purpose of the fund will be realized for the country’s development with safeguards in place for transparency and accountability.”
The IRR, which was released in August this year, spells out the guidelines on the management of the MIF and the operations of the Maharlika Investment Corp. (MIC) that will oversee the funds.
The Maharlika Investment Fund Act was signed into law by the President on July 18 this year. It mandates the establishment of the MIC and the pooling of funds from the Landbank (P50 billion) and DBP (P25 billion) to form the MIF, which will be invested in high-impact projects especially on infrastructure, among others.
Malacañang was targeting to have the law implemented before the end of this year.
The President was set to present the MIF during his visit to the Kingdom of Saudi Arabia this week when he meets with business leaders from the Gulf region.
Senate minority leader Aquilino Pimentel III, one of the petitioners who questioned the constitutionality of the law before the Supreme Court (SC), said the President’s decision to suspend the implementation of the Maharlika law is a “very good development” since the measure “has a lot of defects.”
Pimentel, together with former Bayan Muna lawmakers Neri Colmenares, Carlos Zarate, and Ferdinande Gaite, has asked the High Court to issue a temporary restraining order against the implementation of the MIF.
“The concept has not been fully studied from the very start. Hence, we should (not) wonder why apparently the law is not ready for implementation. Good that the Marcos administration appears to listen to reason,” Pimentel said.
Pimentel has been against the enactment of the MIF law, which he has persistently said was hastily approved by both chambers of Congress, effectively disregarding proper legislative processes under the 1987 Constitution.
He has questioned the urgent certification issued by President Marcos Jr. for the approval of the measure, pointing out that a certification can only be issued during crisis or emergency situations.
Senate deputy minority leader Risa Hontiveros said: “I hope the suspension of the rollout of the Maharlika Investment Fund means that the President is starting to heed our warnings.”
“Indeed, many provisions of the MIF Act require further study. My own view, of course, is that it is beyond repair because the law was rushed and the Philippines is simply not ready at this moment to support a wealth fund,” Hontiveros said.
Sen. Francis Escudero supported the suspension of the law’s implementation, saying that its flaws can be remedied through the fine tuning of its IRR.
Escudero noted that advocates of the measure did not even clarify the MIF’s mandate when the issue was still being debated in the Senate plenary.
“Ano ba talaga ang gusto nilang gawin dito? Para sa akin hindi nasagot ‘yung simpleng katanungan na ‘yan sa haba-haba ng diskusyon namin (What do they really intend to do with it? For me, that was not answered during our lengthy discussions),” he added.
He said the MIF’s “test of economic viability” was not complied with.
While he said the MIF can no longer be scrapped since it has already been signed into law, Escudero said the Executive can improve its IRR.
He said if the President eventually realizes that the MIF is not “convincing,” all he has to do is not fund it.
Escudero also said the Executive should carefully study if the investible funds from Landbank and DBP can earn profits from the MIF.
‘MISLED’
Hontiveros said Finance Secretary Benjamin Diokno “misled the Senate” when he declared that the Landbank and DBP have excess funds “which were idle” and therefore can be used for the MIF.
Hontiveros said Diokno “simply did not have the competence to understand the repercussion of messing with the finances of Landbank and DBP” even if he was a former governor of the Bangko Sentral ng Pilipinas.
She said farmers, fisherfolks, and entrepreneurs stand to suffer when Landbank and DBP pour in their funds to the MIF since the loan they can avail will decrease.
“The suspension of the MIF Act must stand until every flaw or concern raised about the law has been reviewed. Government should never be reckless with the people’s hard-earned money,” she added.
Castro agreed with Bayan Muna executive vice-president Carlos Zarate who has said that “the Marcos administration placed in grave danger the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) respective capitals after the twin state-run depositary banks were required to finance the creation of the Maharlika Investment Fund (MIF).”
“Bayan Muna is not only alarmed but even outraged that the financial institutions’ fiscal health was placed in jeopardy because of the administration’s obsession with MIF,” Zarate said, citing the recent request of the state-run banks seeking temporary reprieve from the BSP regulatory requirements, like the minimum capital requirements, so they can comply with their obligations under the MIF law.
“This is what’s difficult with a rushed law because it lacked further study and it seems that poverty will only worsen because people’s money is at stake here,” Castro said in Filipino.
Albay Rep. Edcel Lagman said: “‘Haste makes waste’ is an appropriate aphorism for inscription on the epitaph of the Maharlika Investment Fund. The MIF Act was enacted with inordinate alacrity without adequate and searching studies from the President’s economic advisers and congressional allies.”
Since the MIF Act bled dry the Landbank and the DBP of their capital assets for infusion to the MIF, Lagman said the two government banks “suffered depletion of their resources so much so that they had to plead for exemption from the reserve requirements of the Bangko Sentral ng Pilipinas.”
“No foreign investor has come to the rescue of the MIF,” Lagman added.
Sen. Sherwin Gatchalian said there is a need to thoroughly study if the money invested by the Landbank and DBP will not affect their stability.
Gatchalian said the “mere fact” that Landbank and DBP asked for a regulatory exemption is proof that they foresee problems coming in.
“Dapat mapag-aralang mabuti ito dahil itong dalawa ay nakapalaking banko at kung magkaroon ng problema, baka makaapekto ito sa buong banking industry natin
(This should be further studied because these banks are very big banks and the country’s banking industry might be affected when problems arise),” Gatchalian said.
PRESIDENT’S PREROGATIVE
Senate President Juan Miguel Zubiri said the suspension of the implementation of the MIF law “is a presidential prerogative.”
“Every policy has a pause button, or like a car, it is equipped with a brake or can be put in park. The President has the wheel, it is up to him whether to step on the gas or to slow down,” Zubiri said.
He said the President may have decelerated the momentum of the MIF Law since so much money is at stake.
“When so much money is at stake, it is better to proceed with an abundance of caution than to be reckless. During the debates on the Maharlika bill, we reminded the executive of the need for responsible stewardship, and, in fact, installed guardrails against fund placements that would result in losses,” Zubiri said.
“Let us trust the President’s wisdom in doing so, for I believe that he or his economic team had good and valid reasons to study the measure further,” he added.
Senate majority leader Joel Villanueva backed the suspension of the law “if the President feels that the IRR needs to be further studied.”
“We are one with the President in ensuring that the objectives of the MIF are achieved and that all proper safeguards are in place,” Villanueva said.
READY
The Office of the Solicitor General (OSG) said it is ready to file the government’s comment on the petition before the SC challenging the fund’s constitutionality.
Solicitor General Menardo Guevarra said his office has yet to officially receive a copy of the SC’s order directing the respondents – Finance chief Benjamin Diokno, and Executive Secretary Lucas Bersamin and the leaders of the Senate and the House of Representatives — to comment on the petition questioning the MIF law.
“If the implementation is indeed suspended, it’s up to the petitioners if they wish to withdraw the petition. But if they don’t, and the Supreme Court does not suspend the proceedings either, the Office of the Solicitor General will be prepared to submit its comment on the validity of the MIF Law,” Guevarra told reporters Wednesday.
“We have been preparing our comment since the court’s resolution appeared on the SC website,” he added.
Earlier, Guevarra said that ever since the MIF law was signed by the President, his office has been looking at legal challenges assailing its passage.
“The Office of the Solicitor General has been closely monitoring the public debates surrounding the fund to identify any legal issues of paramount importance that may be brought before the Supreme Court,” he said last month. — With Raymond Africa and Ashzel Hachero
