Senior Deputy Majority Leader Sandro Marcos
MANILA, Philippines — Despite the speed in which lawmakers are pushing House Bill No. 6398, or the Maharlika Investments Fund Act, Senior Deputy Majority Leader Sandro Marcos on Monday insisted it was not being railroaded at the House of Representatives.
At the sidelines of the bicameral conference committee meeting on the 2023 national budget, Marcos, son of President Marcos and a cosponsor of the bill, told reporters: “(HB 6398) wasn’t railroaded. It goes through a process—first reading, committee, committee report, second reading, third reading. That’s the process. So if it goes through the process, how is it railroaded?”
Filed on Nov. 28 by Speaker Martin Romualdez and six other lawmakers, the House banks and financial intermediaries committee the next day approved it in principle, subject to fine-tuning by a technical working group (TWG). Two days later, the House panel approved the TWG amendments, and set a public consultation on Dec. 5. On Monday, the committee on ways and means approved the tax provision of the proposed wealth fund.
The young Marcos assured the public that the corporation that would manage the fund “will be free from politics, that’s why it needs to be run by technocrats who are not interested in politics.”
Also on Monday, Senior Deputy Speaker Gloria Macapagal-Arroyo defended the bill’s provision making the President chair of the Maharlika board, saying it was a “powerful statement that the highest official of the land will hold himself as ultimately accountable to the Filipino people for the performance of the fund.”
No justification
Still, opposition to the proposed sovereign wealth fund (SWF) continues to grow.
There is “no need or even justification” to put at risk the resources of government financial institutions and pension funds to earn higher returns, especially at this time of ballooning fiscal deficits and public debt, a group of prominent economists, policy groups and business leaders warned.
A dozen advocacy, trade and professional groups issued on Monday a collective statement to oppose HB 6398, warning that it ran contrary to the principles of fiscal prudence, solvency of social pension funds, contingent liabilities, Bangko Sentral ng Pilipinas independence, good governance, and transparency.
Among the signatories were the Foundation For Economic Freedom, Financial Executives Institute of the Philippines, Makati Business Club, Management Association of the Philippines, Movement for Good Governance, and the UP School of Economics Alumni Association.
“There is at present no gap nor ‘missing institution’ in the economy that needs to be solved by the creation of an SWF. The country does not have a bonanza of commodity surpluses that need to be deployed,” the group said. “Instead of leaving a legacy of surplus funds to be managed for future generations, the current generation is leaving a legacy of heavy indebtedness which future generations need to pay or refinance.”
Senior Deputy Speaker Gloria Macapagal-Arroyo
They suggested that the executive and legislative branches focus on strengthening investments in transportation, public health, education, and infrastructure.
Senate scrutiny
Several senators, among them President Marcos’ allies, on Monday also pointed out that the government could not arbitrarily tap the state-managed pension funds of private and public workers to bankroll the proposed Maharlika fund.
Senate Minority Leader Aquilino Pimentel III said the resources of the Government Service Insurance System (GSIS) and the Social Security System (SSS) were owned by its members.
“(There should be) consultation and consent of the owners of the funds they intend to put in higher risk placements,” he said.
“I am apprehensive to touch pension funds because of past experience with (the pension funds of uniformed personnel), which ventured into bad investments,” Sen. JV Ejercito told the Inquirer.
Sen. Juan Edgardo Angara said the wealth fund was a “high risk, high reward endeavor” that needed policies to safeguard the investment from being placed in “riskier endeavors.”
Senate Majority Leader Joel Villanueva and administration Senators Nancy Binay and Francis Escudero said there should be further discussions on the possible sources of investment for the Maharlika wealth fund, urging their fellow lawmakers not to rush the passage of the Maharlika bill.