Stop railroading measure, senators urge Palace
DESPITE the assurance of Senate President Juan Miguel Zubiri that the Senate will approve the bill creating the Maharlika Investment Fund (MIF) before Congress adjourns on June 2, plenary discussions on the measure crept at a snail pace as several senators continued to find loopholes in the proposal.
Senate majority leader Joel Villanueva has said plenary discussions on the proposed MIF are expected to extend until late Monday night or the wee hours of Tuesday morning as several senators have expressed “so many reservations” against the passage of the Senate Bill No. 2020.
Senate minority leader Aquilino Pimentel III said yesterday said that with only two session days remaining before Congress goes on a seven-week break, proponents of the MIF bill have yet to correct its allegedly “unsalvageable” loopholes, which he insisted cannot be set aside because of their “far-reaching implications.”
“Truth is, the bill is unsalvageable and beyond repair… After thorough analysis and careful review of Senate Bill No. 2020, 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 is any at all,” Pimentel said in a statement.
He said creating the proposed MIF, which will require a P500 billion seed money, would force the government to divert resources away from more immediate priorities, such as addressing poverty, hunger, education gaps, joblessness, healthcare concerns, and the country’s increasing debt.
He reiterated there is no need to establish the MIF and that lawmakers have been wasting time discussing the proposed Philippine sovereign wealth fund since the government has no excess funds and has in fact a P13.75 trillion in national debts as of the end of February 2023.
He likewise pointed out that unlike the sovereign wealth fund of other countries which are being funded through budget and trade surplus, and income from in-demand commodities such as oil, the proposed MIF will get its funding from government financial institutions and the national government.
“With no surplus from oil discovery or from trade activities and no windfall profit of any kind, the Philippines has no justifiable reason to form and enter into the world of SWFs and investment funds,” he said, adding that the government has been in a perennial budget deficit and its trade in goods deficit at around $40 billion to $60 billion a year.
Likewise, he said that in the past 10 years, the average annual fiscal deficit amounted to P652.7 billion or an average fiscal deficit-to-GDP ratio of 3.6 percent. At present, the highest deficit-to-GDP ratio was incurred in 2021 equivalent to 8.6 percent which was “no doubt made worse by the COVID-19 pandemic.”
Pimentel said the proposed Maharlika Investment Corporation (MIC), the body which will be created to manage the MIF, will be vested with the power to incur more debts to sustain the Fund.
“The implications of the proposed Maharlika Investment Fund Act are simply too grave for us not to do anything to stop it…These are difficult economic times,” he said.
Sen. Francis Escudero said the “purpose and main reason” for the establishment of the MIF “is still vague and nebulous” and “it is not clear even for those pushing for the bill, much less in the bill itself.”
Saying he has yet to see the final Senate version of the MIF bill, Escudero said: “The economic team, after our discussions, will propose a lot of amendments and (I) would like to see a clean copy and clarify certain issues for the record before voting on it,” Escudero said in a Viber message to the media.
Presidential sister Sen. Imee Marcos continued to question the funding source of the MIF, saying the sources and where the funds will be used remain unclear.
“When you get a windfall, that’s usually the beginning of a sovereign fund. But I don’t feel any windfall right now, I feel utang (debt),” Marcos said, warning funding the MIF could only further increase the government’s national debt.
Likewise, she warned that the scrapped provision making the Social Security System and the Government Service Insurance System as possible sources of funds could again be reinstated since the MIC board of directors “can actually decide on their own.”
Like Escudero, Marcos said she has yet to see the final version of SB 2020.
RAILROADING THE MIF
Escudero cautioned his colleagues against railroading the passage of the MIF proposal, insisting there it still has unclear and missing provisions.
“Wala akong nakikitang rason para ito ay madaliin. Wala namang golden opportunity na dapat sakyan agad ora-orada. Hindi ako nakahandang sabihin na hindi emergency iyon. Pero iyong ihahabol mula Wednesday hanggang July 24, iyon ang hindi ko alam. Puwede namang ipasa sa July, wala namang mawawala (I don’t see any reason why this should be rushed. There is no golden opportunity that we need to ride on in a hasty manner. I am not ready to say that this is not an emergency measure. But to rush its passage just to be included in (the) July 24 [state of the nation address or SONA], that I do not know. We will lose nothing if (it is passed in July),” Escudero said.
“’Haste… (as the saying goes) makes waste.’ This should serve as a warning to those pushing for it because it might just be struck down and end up in the dumpsters if they (proponents) proceed with it in a haphazard and nonchalant manner,” he stressed.
“Up to today, I haven’t seen the ‘test of economic viability’ required by the Constitution before Congress can create a GOCC (Article XII, Section 16 of the 1987 Constitution). This is important in order for the bill to pass constitutional scrutiny in case someone questions it before the SC (Supreme Court),” he said.
Also, he said the commitment that the MIF will earn from investing in infrastructure projects is also questionable since roads, bridges, buildings, or hospitals constructed by the state are supposed to be free of use by the public.
Escudero said the proposed amendments to be introduced by the economic team in the MIF bill should be thoroughly scrutinized since once the proposed measure is passed, it would take a long process again to correct any errors.
Pimentel said passing the proposed measure in a hasty manner “could have long term consequences.”
He said that with a country replete with a history of corruption and mismanagement of public funds, the bill’s lack of transparency safeguards can open it to all kinds of abuses.
“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 is a reason why it took Norway 12 years to pas its own sovereign wealth fund,” he added.
Marcos said she would vote against the approval of the MIF bill is the Senate leadership insists on rushing it.
“Ako, kung saka-sakaling minamadali, hindi ako papayag kasi malaking pera yan. Mababaon ang ating mga anak at hindi dapat minamadali yan ganyan (In case its passage will be rushed, I will object to it because we are talking here of big money. Our children will be buried deep in debt and this kind of things should not be rushed),” Marcos said.
Senate President Juan Miguel Zubiri last week assured President Marcos Jr. the upper chamber will hasten plenary debates on the Maharlika bill and promised the measure will be approved on second and final reading, subjected to bicameral conference committee discussions and ratified this week so it can be transmitted to Malacañang before June 2 when Congress goes on sine die adjournment.
The Senate only has today (Tuesday) and tomorrow (Wednesday) to cram all the required legislative process before the June 2 adjournment. The Senate and the House of Representatives normally do not hold sessions on Thursdays and do not have sessions and work on Fridays.
The President last week certified Senate Bill No. 2020 as urgent and asked the Senate to pass it as soon as possible.
The House of Representatives has approved its version of the proposed legislation last December before Congress took a break for the holidays.
