Maharlika fund manager must be independent – Lagman
Rep. Edcel Lagman. INQUIRER FILE PHOTO
MANILA, Philippines — Albay Rep. Edcel Lagman, an opposition member of the House of Representatives, on Saturday said the proposed Maharlika Wealth Fund (MWF) should not be managed by the finance secretary because he would be unable to assert independence from the president and would instead be beholden to him.
Lagman was reacting to one of the amendments of House Bill No. 6398 creating the Maharlika Investment Fund Corp. (MIF) that followed widespread criticisms of the questionable timeliness, structure and funding of the supposed sovereign wealth fund.
“If the Maharlika Sovereign Wealth Fund is created, its corporate management must be independent from partisan control and interference,” said Lagman, president of the Liberal Party.
“The chair of the Maharlika Investment Corp. must be a truly qualified and experienced economic manager from the private sector,” he added.
Fund pared down
The bill originally assigned President Marcos as the chair of the MIF Corp. but he was replaced by Finance Secretary Benjamin Diokno in an amendment to the measure approved by the House appropriations panel on Friday.
Article continues after this advertisementBut Lagman said the finance secretary would be serving at the pleasure of the President and “must conform to the President’s bidding to retain his position.
Article continues after this advertisement”The House committee also slashed P200 billion off the original P275-billion initial funding of the MWF when it excluded a total of P175 billion in contributions from the Government Service Insurance System and the Social Security System, and a P25-billion allocation from the national budget.
The panel approved getting about P35 billion in dividends from the Bangko Sentral ng Pilipinas (BSP) to shore up the much-reduced initial funding.
With the initial funding of the MWF limited to contributions from Land Bank of the Philippines, the Development Bank of the Philippines and the BSP, the proposed seed money went down to just P110 billion.
Sen. Sherwin Gatchalian on Saturday expressed skepticism over the timing of the establishment of the Maharlika fund as the country did not have enough money to get it off the ground.
“In my initial analysis, I don’t see any excess funds,” he said on Saturday.
Gatchalian said the country had already used up the Malampaya fund, its export earnings were not large enough and income from mining nickel, gold and copper was “not that big.”
“Our country right now faces all kinds of deficits—budget deficit, account deficit, trade deficit. If we look at the balance of payments, this seed fund, which would serve as sort of a working capital, is also in the negative,” the senator said.
He said it won’t do for a sovereign wealth fund to be making investments amounting to only P1 billion or P2 billion “but hundreds of billions.”
Other sources
Gatchalian also opposed borrowing funds as seed money for a sovereign wealth fund that would be used for investments.“I am not aware of a concept wherein we borrow in order to invest. What if the investment does not generate revenues? So where do you get money to pay for the interest of the funds you borrowed?” he said.
The House committee amendments had removed allocations from the national budget for Maharlika but it may get money from gaming revenues, royalties, proceeds from privatization of government assets and other sources.
The pension funds may also later contribute, depending on the decision of their respective boards.
Despite the proposed changes in the bill, a Makabayan lawmaker insisted that the plan to create the MWF be scrapped as it would be “prone to corruption, lack of transparency and accountability.”
“It is best that Congress junk this supposed wealth fund now and devote its time and resources in increasing the wages of our workers and increasing aid for the poor,” House Deputy Minority Leader Rep. France Castro said.
