Maharlika Investment Fund money must come from ‘wealth tax’ – group

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MANILA, Philippines — A progressive group is seeing no problem with the proposed sovereign wealth fund (SWF) or Maharlika Investment Fund if the money for it would come from a wealth tax and not from income generated by state-owned insurers.

Nice Coronacion, deputy secretary general of the Sentro ng mga Nagkakaisa at Progresibong Manggagawa (Sentro), pointed out that a wealth tax could be an appropriate source of the Maharlika Investment Fund because a surplus fund should not come from collections that the government cannot afford to lose.

The establishment of the Maharlika Investment Fund is being proposed under House Bill No. 6398 authored by Speaker and Leyte 1st District Rep. Ferdinand Martin Romualdez; Majority Floor Leader and Zamboanga City 2nd District Rep. Manuel Jose Dalipe; Ilocos Norte 1st District Rep. Ferdinand Alexander “Sandro” Marcos; Marikina 2nd District Rep. Stella Quimbo; and Tingog Party-list Reps. Yedda Marie Romualdez and Jude Acidre.

“If we want to develop a Sovereign Wealth Fund and use it strategically for economic development, we propose a wealth tax to serve as the basis for the funds to be used,” Coronacion told lawmakers during Monday’s hearing of the House committee on banks and financial intermediaries.

“Kung may wealth tax tayo, iyon ‘yung pwedeng pagkuhanan ng surplus for investment sa Sovereign Wealth Fund. ‘Wag natin gamitin ang pondong hindi natin kayang mawala/mawaldas sa maling investment,” she added.

(If we have a wealth tax, we can source the surplus needed for investment into the Sovereign Wealth Fund. Let us not use the funds that we cannot afford to lose or to spend in wrong investments.)

The labor organization also raised concerns over using workers’ contributions to investments or undertakings that do not necessarily benefit them in the long run.

“Using worker’s pension funds for the Maharlika Wealth Fund amounts to privatization of these funds for use in speculative economic activities. This could lead to the investment of hard-earned money into activities that do not directly lead to economic and industrial development, instead towards toxic and potentially dangerous assets,” Coronacion stressed.

“We should not invest into something, where profit is the main goal – we should invest towards long-term economic development,” she added.

Under House Bill No. 6398, the government would mainly utilize funds from government-owned and controlled corporations to create a pooled budget that the proposed Maharlika Investment Corp. will tap to make investments here and abroad.

Proponents are eyeing to put P275 billion seed money to the Maharlika Investment Fund which will be derived specifically from the Government Service Insurance System (P125 billion), Social Security System (P50 billion), Land Bank of the Philippines (P50 billion), Development Bank of the Philippines (P25 billion), and the General Appropriations Act (P25 billion).

READ: Romualdez, other solons call for Maharlika Investment Fund for gov’t investment 

A proposal for wealth tax, meanwhile, had been raised by the Makabayan bloc. Based on the group’s idea, the country’s super rich will be taxed for their assets amounting to at least P1 billion. The group believed that this amendment to the National Internal Revenue Code of 1997 will generate P236.7 billion worth of funds, by just taxing the 50 richest Filipinos.

But the Makabayan bloc’s proposal was not passed during the 18th Congress due to time constraints.

READ: Makabayan bloc wants ‘wealth tax’ for people with over P1-B worth of assets 

Makabayan bloc member and Alliance of Concerned Teachers party-list Rep. France Castro said that if the Marcos administration is sincere in improving the lives of the people, a wealth tax measure should be adopted – and the premiums of Filipino workers must be left untouched.

“If the Marcos administration is sincere in uplifting the quality of life of Filipinos, it should not introduce measures that would endanger their hard earned money and pension for their retirement. The administration should instead impose a wealth tax on the super rich who can afford to shell out money without even affecting their lavish lifestyles,” Castro said.

“Ang mayayaman naman ang patulungin para iangat ng ekomomiya, hindi ‘yung mga mahihirap at middle class na hirap na hirap na nga sa buhay ay isusugal pa ng administrasyon pati ang kanilang pension,” she added.

(Let the rich help in nation-building, instead of putting the burden on the poor and the middle class who are already struggling with their daily lives, and whose pension would be put on the line.)

The House committee on banks and financial intermediaries was tasked to deliberate on House Bill No. 6398,

Ilocos Norte 1st District Rep. Sandro Marcos, a son of President Ferdinand Marcos Jr., had defended the bill, saying they are not railroading its passage and that it is going through the correct processes.

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