Maharlika bill is ‘unsalvageable, beyond repair’ – Pimentel
MANILA, Philippines — Senate Minority Leader Aquilino “Koko” Pimentel III is on the move to convince his fellow lawmakers to reject the controversial Maharlika Investment Fund (MIF) bill – a priority measure of the Marcos administration.
Pimentel, a staunch dissenter of the MIF bill, said he has thoroughly reviewed and analyzed Senate Bill 2020 – which contains the contentious proposal for the investment fund.
“Truth is, this bill is unsalvageable and beyond repair,” he said in a statement.
“I have come to the conclusion that the overall risk is too great that it outweighs whatever the potential benefits of the measure are, if there [are] any at all.”
Under the MIF bill, Maharlika Investment Corporation (MIC) will have an authorized capital stock of P500 billion.
This, Pimentel noted, “would require the government to divert resources away from more immediate priorities such as addressing poverty, hunger, education, gaps, joblessness, healthcare deficiencies, and the country’s ballooning debt.”
The legislator argued fund schemes similar to the MIF were brought to life in other countries through budget and trade surplus, and income from in-demand commodities.
But, in the Philippines, there is no new fund source since there is no surplus in trade or budget, Pimentel noted.
“With no surplus from oil discovery or trade activities and no windfall profit of any kind, the Philippines has no justifiable reason to form and enter into the world of sovereign wealth funds and investment funds,” he added.
Pimentel also took note of data from the Senate Economic Planning Office, which shows that government has had an average annual fiscal deficit of P652.7 billion over the past decade.
On top of this, he said, the national debt is at a staggering P13.75 trillion as of February 2023.
“The implications of the proposed Maharlika Investment Fund Act are simply too grave for us not to do anything to stop it,” the senator said, noting that MIC will only dig the country deeper into debt.
He underscored the “difficult economic times” across the globe, as seen in the collapse of several foreign banks.
Pimentel also cited Norway’s wealth fund, which had been repeatedly cited as an ideal for sovereign wealth funds.
The fund suffered a record loss of $164.4 billion in 2022 as its stocks and bonds were plagued by the Ukraine-Russia conflict and global inflation.
“What I have learned from the few days the bill is on the floor, it has become increasingly evident that MIF’s shortcomings are insurmountable. There’s a reason why it took Norway 12 years to pass its own sovereign wealth fund,” he said.
Pimentel further argued the proposed MIF’s lack of transparency safeguards makes it vulnerable to abuses, especially given the country’s history of corruption and mismanagement of public funds.
Some senators want to pass the MIF bill before Congress goes on sine die adjournment on June 2, 2023.
President Ferdinand “Bongbong” Marcos Jr. had certified the proposed measure as urgent, allowing the chamber to fast-track its passage.
But the Senate minority bloc, where Pimentel and opposition Senator Risa Hontiveros belong, had vowed to fiercely oppose the proposed MIF.
In December 2022, Marcos also tagged as high-priority a different version of the MIF bill in the House of Representatives.
The House passed the measure in less than a month since it was filed by Speaker Ferdinand Martin Romualdez and other lawmakers.