Enrile questions Maharlika Fund as bill gathers 200 authors in House

Chief Presidential Legal Counsel Juan Ponce Enrile has said the proposed Maharlika Investment Fund (MIF), which already has at least 200 authors in the House of Representatives, should be studied thoroughly.

"Mabuting pag-aralan nang mabuti sapagkat OK lang habang presidente si Presidente (Ferdinand Marcos Jr.). Pero long-term investment ‘yan e. Kailangang magkaroon ng safeguards para hindi mawawaldas gaya ng naunang mga project," Enrile said in a phone interview with GMA Integrated News, according to a report on GMA News' Saksi on Monday.

(It would be good to further study it because it's OK while President Ferdinand Marcos Jr. is president. But that is a long-term investment. There has to be safeguards so the fund will not be misused like in previous projects.)

He was referring to House Bill 6608 which seeks to maximize investible funds of state-run financial institutions via investments and ultimately hike public funds.

“I am not just ready to say I am in favor of the proposal. I'm asking questions...what is the aim or its purpose? What is the economic value of the proposal to the nation? Where do we get the money to capitalize it?” Enrile said.

“Is it going to be from tax money or from borrowings?” he added.

House banks and financial intermediaries chairperson Irwin Tieng said he understands the concerns of Enrile and they always take into consideration his comments.

He added they will await the comments and suggestions of Enrile and they will discuss it in the plenary.

Under the bill, the MIF will be sourced from the investible funds of the state-run Land Bank of the Philippines (P50 billion), Development Bank of the Philippines (P25 billion), and the dividends and profits of the Bangko Sentral ng Pilipinas.

House appropriations panel senior vice chairperson Stella Quimbo, one of the authors of the bill, also repeatedly assured the public that the MIF should be given a chance since it will allow government financial institutions (GFIs) to raise huge amounts of funds at an unprecedented level necessary to achieve progress.

“As it is, the interest rate on GFIs’ investments are not that high-yielding. Kung pinagsama-sama ang kita [ng mga GFIs], tataas ang interest doon sa [investment] placement [ng Maharlika fund], kikita ang GFIs. And under Dividends law, kapag kumita ang GFIs at GOCCs, kalahati nu'n ay mapupunta sa national government,” Quimbo told reporters.

(If we pool the GFIs' earnings, the interest rate will go up, the GFIs will earn. And under Dividends law, when GFIs and GOCCs earn, half of the earnings goes to the national government.)

“Kaya kailangan tayong humanap ng paraan para lumago ang kita nila at lumago ang ating pondo. We just passed our budget [for 2023], and it is frustrating na iyong P5.268 trillion ay talagang kulang,” she said.

(We really need to look for ways to help GFIs earn so we would have additional public funds. We just passed our budget, and it is frustrating that P5.268 trillion is really not enough.)

Quimbo said that there is still a huge unmet funding requirement for social services such as government subsidy, hospitals, education, airports, bridges and flood control projects.

“Kulang na kulang talaga. Kaya ito ang pinanggagalingan nito [Maharlika fund bill]. Kung hindi natin babaguhin ang paraan ng paghahanap natin ng pondo, mahirap mag-modernize as nation,” she said.

(We really lack resources, and that is where the Maharlika fund initiative is coming from. If we don’t change our ways, it will be tough for our nation to modernize.)

“Kailangan natin ng game changer na paraan para dumami ang ating pondo in an exponential way,” she added.

(We need a game changer to generate public funds in an exponential way.)

200 authors

Meanwhile, Tieng said Tuesday that the MIF bill has around 200 authors already.

“Based on the advisement of my Committee secretary, it (authors of the MIF bill) is around 200. The last time I checked, it was 80...but as of yesterday, it was around 200,” he said in an ANC interview.

“There’s a lot of bills before that have a lot of co-authors, but what I can say is that maybe, they understand this bill more now, and that is why they are supporting the measure,” he added.

The MIF initially aimed to raise P275 billion, with P175 billion of it supposed to be funded by the state-run Government Service Insurance System and the Social Security System which are repositories of the employees’ pension.

The authors, however, eventually dropped them as mandatory fund sources to douse public opposition.

The same bill provides that public and private actors found guilty of causing lost investments for the MIF would be meted jail time or fines or both, at the discretion of the court.

Further, the bill states that 20% of the MIF profits from its investments will be spent on social welfare programs.

As to criticisms from retired Supreme Court Justice Antonio Carpio and economist Winnie Monsod that the MIF should not be pursued by the Philippines in the first place because it does not have surplus fund, Tieng maintained that it is within the mandate of state-run financial institutions to invest their investible funds, including in the MIF.

“They are investible funds. We will not say they are surplus funds, but they are investible funds. It can be called an investment fund. It is the money of the Filipino people,” he said.

January 2023

In a separate interview with CNN Philippines, Surigao del Sur Representative Johnny Pimentel said the MIF should be passed by the House on third and final reading by January 2023.

“We're in the period of debate and discussion. With no glitches, the bill should be approved on second reading this Thursday. [The] target for third reading [approval] is by the end of January 2023,” Pimentel said.

Pimentel also said that aside from the LBP, DBP and BSP, the MIF can also be funded by the profits from the Malampaya fund, the gas money for the government sourced from payments of oil companies Caltex and Shell for extracting natural gas in Malampaya oil field in Palawan province, as well as the Philippine Amusement and Gaming Corporation (Pagcor).

Under the law, the Malampaya fund should be spent for energy development projects.

“What we will get from PAGCOR, LBP, DBP are funds that are investible. We won't get money intended for programs and operations,” Pimentel said.

Tieng, for his part, said authors of the measure are keen to increase penalties on bad actors.

“The authors are looking at increasing penalties and the number of independent directors in the board,” Tieng said during the public briefing.

“At the end of the day, this will be for the benefit of the Filipinos,” Tieng added.

House members from six different political parties earlier endorsed the passage of the MIF, saying it is what the country, reeling from the wrath of the COVID-19 pandemic, needs. —AOL/KG, GMA Integrated News