‘PH has no wealth, no surplus of funds’
THE Makabayan bloc yesterday said the Marcos administration should completely give up the controversial bill seeking to create a sovereign wealth fund for the simple reason that the Philippines has no “wealth” to speak of and is merely running on an annual deficit budget.
Rep. France Castro (PL, ACT) said the proposal to establish the Maharlika Investment Fund (MIF) should be shelved even if bill proponents have already agreed to remove the Government Service Insurance System (GSIS) and the Social Security System (SSS) as fund contributors.
Castro said the concept of sovereign wealth fund does not apply to a poor country like the Philippines.
“The truth remains that we have no surplus of funds, we have no wealth to speak of if we look at our records. That’s why this bill has to be junked and set aside,” Castro told an online press conference.
She insisted the bill is a mistake because the country is mired in debt, which stands at P13.52 trillion.
“What’s the opposite of surplus? It’s debt, right? So, we really don’t have a surplus. We have a huge debt,” she added.
Castro noted that the government has a P1.6 trillion projected budget deficit by 2023 “that’s why this Maharlika Investment Fund bill should not be passed.”
Another Makabayan lawmaker, Rep. Arlene Brosas (PL, Gabriela), also called for the junking of the bill as she warned that the proposed fund could be another source of graft and corruption.
“Even if GSIS and SSS are removed as sources of funding, the Maharlika Fund can still turn into a well of corruption, especially corruption is endemic in the government and there are no safeguards that are being proposed to ensure that the money will be spent correctly,” Brosas said.
For his part, Rep. Raoul Manuel (PL, Kabataan) said the hardworking masses should not be made to pay for the proposed fund, which he said should be taken from the taxes of the rich and from those with ill-gotten wealth.
“If Maharlika Fund will be created, it should come from (the) wealth tax and the collection of ill-gotten wealth,” Manuel said.
Castro said the bill “remains rotten no matter how hard they try to deodorize it and change its provisions.”
The House leadership on Wednesday night announced that it was removing state pension firms GSIS and SSS as contributors to the Maharlika wealth fund after the provision drew flak.
It said consultations made validated the concerns raised by the public, especially workers who pay their monthly contributions to the GSIS and SSS who fear that they may lose their money because of the bill.
The House leadership made the concession to remove the two agencies as it tries to fasttrack the approval of the measure, the second reading of which is being eyed before sessions adjourn this month despite the opposition raised by lawmakers led by the Makabayan bloc.
The proposed amendment will be taken up by the House Committee on Appropriations today.
Under the revision, the Bangko Sentral ng Pilipinas has been named as replacement contributor, along with state-run banks Landbank of the Philippines (P50 billion), and the Development Bank of the Philippines (P25 billion).
Marikina Rep. Stella Quimbo, a senior vice chair of the committee on appropriations, said the seed funding for the Maharlika Fund will go down to around P150 billion without the contributions from GSIS and SSS.
“I don’t want to preempt how much it is going to be but to me, P150 billion is enough to start it,” Quimbo told ANC. “Again, let us start small. Let’s grow it first and let’s see how much we can contribute (from that initial fund) to support the national budget, and we’ll see how it goes.”
Speaker Martin Romualdez’s House Bill No. 6393 originally sought P275 billion seed funding for the Maharlika Wealth Fund patterned after the sovereign wealth fund of other countries, “to maximize the profitability of investible government funds for the benefit of the Filipino people.”
To meet the P275 billion target, the initial proposal was to source at least P125 billion of the Maharlika Wealth Fund Act from the GSIS, P50 billion each from the SSS and Land Bank and P25 billion each from the DBP and Treasury of the Philippines.
The measure also calls for the creation of “Maharlika Investment Corporation” (MIC), a government-owned and controlled corporation (GOCC) responsible for the overall governance and management of the MIF.
‘DIFFICULT’
Senate minority leader Aquilino Pimentel III the proposed Maharlika fund faces a tough time at the Senate despite the amendment to remove the GSIS and SSS as fund sources.
Pimentel, in a message to the media, said any measure which has not been well thought of has a slim chance of passing in the Senate.
“An idea which keeps on changing because it hasn’t been thought out well and was rushed, will always have a more difficult time in the Senate,” Pimentel said, adding that the Senate has yet to come up with its version of the measure.
Pimentel said the idea to have a sovereign fund is based on the premise that the government has excess funds, which he said is not applicable in the case of the Philippines.
“Ang gulo nila. Basic na basic ‘yan, ‘surplus’ concept and yet even without a surplus they continue to espouse a wealth or investment fund. Ano proof na no surplus? Kaya nga tayo baon na sa utang (They are disorganized. It is basic concept that [this bill] is based on ‘surplus’ and yet even without surplus they continue to espouse a wealth or investment fund. What’s the proof that we don’t have surplus? We are buried in debt.),” Pimentel said.
“The Maharlika Fund proposal is weak not only because the arguments for it are weak, but (because) the objections against it are strong,” he added.
Senate deputy minority leader Risa Hontiveros said lauded the removal of the GSIS and SSS in the list of primary contributors but asked: “Do state-controlled banks have enough budget to fund the sovereign wealth fund? Now, they really would have to examine if there are excess funds at Landbank, DBP and BSP, that they have been brandishing as ‘enough’,” Hontiveros said.
“The DoF Secretary even said he wants the peso defended by releasing massive BSP foreign reserves when there is an attack on the peso. Saan pupulutin ngayon ang mga pangakong ito?
(The finance secretary even said he wants the peso defended by releasing massive BSP foreign reserves when there is an attack on the peso. Where will all these promises go?) It is only a matter of time before this trial balloon completely loses air, because, as this retraction shows, we don’t need and can’t afford a sovereign wealth fund),” she added.
Senate majority leader Joel Villanueva said the House move to drop SSS and GSIS as fund sources is a welcome move.
“This is a welcome development, and we thank our colleagues in the House of Representatives for heeding our call to exclude the GSIS and SSS pension funds from the proposed Maharlika Wealth Fund. We reiterate that we need to protect the retirement funds and benefits of our workers. We also proposed alternative sources of funds like revenues from the mining and plastic industry,” Villanueva said.
He said that establishing a sovereign wealth fund is a very good proposal, “but we have to be circumspect about the sources of the fund and how it will be managed.”
“In other countries, their central banks are the ones who manage these funds, which is why we can look into giving the Bangko Sentral ng Pilipinas the responsibility of managing the SWF (sovereign wealth fund) as an independent financial institution.
Sen. Joseph Victor Ejercito said he “will not support any measure that will gamble on SSS and GSIS pension.”
‘SMALL WIN’
The Nagkaisa Labor Coalition (NAGKAISA) lauded what it described as “small” and “initial” victory of the people against the Maharlika Fund.
In a statement, NAGKAISA said it welcomes the exclusion of the SSS and GSIS funds as among the capital sources of the proposed investment fund.
“In a united voice, including online petition and some peaceful concerted actions, the workers’ strong opposition to the establishment of the Maharlika wealth fund made initial victory when the House committee proposed to withdraw the inclusion of SSS and GSIS fund from Maharlika,” said NAGKAISA.
“We and the workers’ groups are elated with this small but significant victory with lasting effect… In union, there is strength, so to speak,” it also said.
To prevent a repeat of a similar attempt to misuse SSS and GSIS funds, the labor organization said there is a need to ensure that workers’ voices are heard within the two institutions.
This, it said, means that there must be consultations and dialogue held between private sector workers and SSS, and government personnel and GSIS.
“To prevent future attempt at misappropriating pension funds, NAGKAISA calls for regular dialogue with SSS and GSIS managements, or a mechanism for referendum be setup,” it said.
“(This is) in order to get the sense of members on important decisions and, ultimately, for the sake of transparency and accountability,” it also said. — With Raymond Africa and Gerard Naval
