More questions than answers

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IN the run-up to the holidays and the end of the year, our legislators, officials and media are locked in serious discussions on the proposed Maharlika Wealth Fund (MWF), even as the proponents of the bill creating such a fund have started to tweak their original proposal. The fund had a proposed initial capital of P275 billion, to be invested here and abroad and hopefully to raise money for local development projects such as in transportation, infrastructure, energy and telecommunication.

Among the changes made is the deletion of funds from the Social Security System (SSS) and the Government Service Insurance System (GSIS) from the original sources of MWF seed capital, to be replaced by the Bangko Sentral ng Pilipinas (BSP).

‘Pimentel and others have pointed out that the proposal has been
undergoing revisions upon revisions, which shows that it is not adequately vetted by the proponents…’

The central bank said they may have a surplus of P30 billion to P35 billion to contribute to the fund. This would be added to the P75 billion which will be jointly contributed by the Land Bank and the Development Bank of the Philippines, and so the seed capital of MWF would amount only to P105 billion to P110 billion, as a result of the non-participation of the SSS and the GSIS.

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Another change made is that the President of the Philippines will no longer be the chairman of the Fund, but will be replaced by the finance secretary, who is after all his/her alter ego.

“From the President to his alter ego, the finance secretary, to chair the Maharlika investment corporation — what is the difference?” Albay Rep. Edcel Lagman said in a statement.

“The finance secretary serves at the pleasure of the President and must conform to the President’s bidding to retain his position.”

Lagman, like other critics, correctly pointed out that if the Maharlika Sovereign Wealth Fund is created, its corporate management must be independent from partisan control and interference. The chairman must be a truly qualified and experienced economic manager from the private sector.

Meanwhile in the Senate, Sen. Aquilino “Koko” Pimentel said the bill is so contentious that there should always be a quorum in the Senate if and when the measure reaches the upper chamber for scrutiny. This House bill has no counterpart bill yet in the Senate.

Pimentel and others have pointed out that the proposal has been undergoing revisions upon revisions, which shows that it is not adequately vetted by the proponents, and Congress should never be rushed into passing it.

MWF is a risky proposition, especially so today when many economists are predicting a looming global recession next year.

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