SENATE minority leader Aquilino “Koko” Pimentel III over the weekend said it is “pointless” to establish the proposed Maharlika Investment Fund (MIF) through loans since the country’s debt has already ballooned to P13.6 trillion as of October this year.
In an interview with radio dwIZ on Saturday, Pimentel said the provision in the bill’s draft that the government can secure loans to fund the MIF is worrisome as it means additional debts for the country.
“Dito ako natatakot dahil may nakita ako sa draft na puwedeng humiram. Ang gobyerno nga kada taon ay humihiram, then gagawa pa tayo ng entity para makahiram ulit, nagdagdag pa tayo ng isang ahensiya na mangungutang. Alam naman nila walang surplus, wala tayong windfall
(I have seen a draft of the bill and what I am worried about is that the government can borrow money [as seed money] to establish the fund. The government has been borrowing every year, and here we are creating an entity that can borrow more money. We all know that we do not have surplus, we do not have a windfall),” Pimentel said.
Pimentel said this is why their counterparts at the House of Representatives should slow down and thoroughly study first the establishment of the proposed sovereign wealth fund before approving it.
“There is really no point in rushing the formation of a wealth fund na ilalagay natin isa sa powers ay mangutang (There is really no point in rushing the formation of a wealth fund that we will give powers to borrow money),” he said, adding the warning that this could open a pandora’s box for corruption.
“There has been a lot of instances involving corruption in government in the past,” he also said.
Sen. Sherwin Gatchalian agreed with Pimentel, saying it made no sense if the loans will be secured from the Land Bank of the Philippines and Development Bank of the Philippines to establish the MIF.
“Wala akong alam na konsepto na uutang ka para mag-invest. Kasi kung uutang ka eh paano kung ang investment mo hindi pa bumabangon. Paano mo mababayaran ang utang?
So, bad practice yung uutang ka then iinvest mo. Even in the private sector, uutang ka, iinvest mo? Dahil ang utang mo may interest yan at one point, babayaran mo (I do not know of a concept that you will borrow money so you can invest. What will happen if your investment sleeps, how can you pay your debts? So, it is bad practice if you borrow money then invest it. Even in the private sector, you do not borrow money and then invest it.
Because your debt will have interests that you will also have to pay),” Gatchalian said.
Gatchalian said he sees no possible source of funds for the MIF.
“Sa unang pag aaral ko, wala akong makitang excess funds. ‘Yung Malampaya nagamit na sa pagpapababa ng kuryente natin. Kung matatandaan natin, inaprubahan natin ang Murang Kuryente Act… Hindi naman tayo nag e-export ng malaki. In fact, may deficit pa tayo for many, many years…So, parang wala akong nakikitang pagkukunan…Ang caveat lang ay baka may pondo na hindi pa nakikita, for example, sa Bangko Sentral na puwedeng gamitin (Based on my initial study, I did not see any excess funds. Income from the Malampaya gas project is already being used to lower the cost of electricity through the passage of the Murang Kuryente Act… Our exports are not that big, too. In fact, we have been on budget deficit for many, many years… So, it looks like there are no sources of funds… But the caveat is maybe there are funds which we have not yet seen, probably in the Bangko Sentral ng Pilipinas [Central Bank of the Philippines]),” he said in a radio interview also on Saturday.
Gatchalian said it is a welcome development that proponents of the measure in the lower house have excluded funds from the Social Security System and the Government Service Insurance System, but they will go back to the question of where the government will get the money for the wealth fund.
“Parte ‘yan ng legislative process. Pero para sa akin, babagsak tayo sa pinakamahalagang tanong — may pera ba o wala? Meron ba tayong excess funds o wala? Yun ang pinakamahalagang tanong. And I think itong legal questions ay puwedeng maayos naman yan dahil batas yan (That’s part of the legislation process. But for me, the most important question is — do we have money or not? Do we have excess funds or not? The legal questions can be ironed out because that is a law),” he said.
Gatchalian recalled that in when he was the chairman of the Senate committee on economics in 2016, a similar measure was filed but remained pending at the committee level.
“Isa ‘yan sa pinag-aralan namin, internally. Unang tanong ko sa aking research team, hanapan niyo nga saan puwedeng kumuha ng pondo dahil bakit pa natin pag-uusapan itong batas kung walang malalagay na pondo. Nagsasayang lang tayo ng oras at panahon.
At that time wala kaming nakitang puwedeng pagkunan dahil alam natin halos lahat in deficit tayo (We studied that. I asked my research team to look for possible sources of funds before we make any discussions on the measure. Because if we do not have funds for it, we will just be wasting our time. At that time, we did not see any source of funds because we all know that we have a budget deficit),” Gatchalian said.
WPS OIL ROYALTIES
Surigao del Sur Rep. Johnny Pimentel said all future national government royalties from forthcoming offshore natural gas projects in the West Philippine Sea should be put in the proposed MIF.
“We would highly recommend that all potential government earnings from prospective undersea gas development projects — excluding those from Malampaya — should accrue to the MIF,” he said.
“We cannot include the SSS and GSIS in the MIF. It would be untenable. The national government itself should put in all the money for the MIF,” Pimentel said.
The House leadership has removed the GSIS and the SSS as fund contributors under House Bill No. 6393 filed by Speaker Martin Romualdez following 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.
Under the revision, the Bangko Sentral ng Pilipinas has been named as replacement contributor, along with state-run banks Landbank (P50 billion), and the DBP (P25 billion).
Marikina Rep. Stella Quimbo, a senior vice chair of the committee on appropriations, last week said the seed funding for the Maharlika Fund will go down to around P150 billion without the contributions from GSIS and SSS.
Pimentel noted that the commercial development of another gas field comparable in size to Malampaya could easily yield a windfall of more than P500 billion in government royalties over a 20-year period.
“Right now, the Malampaya royalties accrue to the national treasury every year and help fund the national budget. This is okay since the project’s gas deposits are nearing depletion any way,” Pimentel said. “However, once the Sampaguita gas discovery (in the Reed Bank) is eventually developed, we would want 100 percent of the royalties to be invested in the MIF for the long-term benefit of the Filipino people.”
Pimentel, a former chair of the House committee on strategic intelligence, is the proponent of a bill that seeks to appropriate P5 billion for the installation of new naval forward operating bases to secure the West Philippine Sea’s gas and oil deposits for the country.
The Malampaya Deepwater Gas-to-Power Project has been extracting gas and condensate from the depths of the Palawan basin in the West Philippine Sea since 2002.
Pimentel further noted that the national treasury collected P19.8 billion in royalties from Malampaya in 2021 alone, up from P19.1 billion in 2020, citing figures from the annual Budget of Expenditures and Sources of Financing submitted by Malacañang to Congress.
The Philippine government, as owner of the gas and oil under the seabed, collects as royalty 60 percent of the net proceeds from Malampaya’s petroleum business.
Malampaya was originally operated by Shell Philippines Exploration B.V. but is now being run by businessman Enrique Razon Jr.’s Prime Infrastructure Capital Inc.
Prime Infra is believed to be looking to further extend Malampaya’s existing 504-kilometer subsea pipeline to convey all future gas supplies that may be harvested from Sampaguita to power plants in Batangas.
Another Razon-controlled entity, Monte Oro Resources and Energy Inc., has a 30 percent participating interest in the petroleum service contract that covers Sampaguita, which is located 250 kilometers southwest of Malampaya. — With Wendell Vigilia
