Pimentel flags 'contradictions' in Maharlika Fund bill amid Marcos' plan to tackle it at Davos

Senate Minority Leader Aquilino "Koko" Pimentel III on Monday flagged "internal contradictions" in the bill creating the Maharlika Investment Fund amid President Ferdinand "Bongbong" Marcos Jr.'s plan to tackle it at the World Economic Forum scheduled from January 16 to 20 in Davos, Switzerland.

"Number one, is this a corporation where the profits will be given to the investors? Why will the big businesses who are organized for profits attending the Davos conference invest in a corporation where it is not for profit?" Pimentel said in an interview on CNN Philippines.

"So the approved version of the Maharlika measure is very different from the initial version filed. It has shifted in concept and focus and idea. That's why the final version accommodates different concepts which are already contradicting each other," he added.

Pimentel reiterated that tackling the Maharlika Investment Fund is premature as the bill creating it "is not well thought of and it is not well written."

GMA News Online has reached out to Presidential Communications Secretary Cheloy Garafil and the office of Marikina 2nd District Rep. Stella Luz Quimbo—one of the authors of the bill—to comment on Pimentel's remarks but they have yet to respond as of posting time.

In a separate statement, Senate Deputy Minority Leader Risa Hontiveros echoed Pimente's statement that the MIF's soft launch is premature and the administration has "nothing to present '' as the bill creating it has yet to be deliberated at the Senate.

"[I]sn’t it jumping the gun to be talking about it in front of world economic leaders? Hilaw ang diskusyon at maraming butas ang konsepto, magmumukhang amateur ang Presidente,” Hontiveros said.

(The discussions on the MIF are raw and the concept has many holes that need to be addressed. This will make the president appear like he is an amateur.)

"Indeed, it makes sense to talk to an international audience about a domestically-oriented sovereign development fund if there is already a portfolio of attractive projects that have been assembled. But we don’t have that yet," Hontiveros said.

Compared to Indonesia, Hontiveros said the Philippines lacks wealth windfall from exports to fund the MIF and the portfolio of ready projects that could attract investors.

"Indonesia has been touring the international circuit because it has tens of billions of dollars worth of ready projects that have been individually structured to attract capital. Indonesia also had significant windfall from its petroleum and mineral exports — with which it has decided to seed the Indonesian Investment Authority. Unfortunately, we do not have either of these two," she said.

Instead of pushing for the creation of MIF, Hontiveros said the administration must focus on the current problems that the country is facing such as the high prices of food and energy.

"Maraming problema ang bansa na dapat unahin. Problemang direktang tumatama sa mga Pilipino gaya ng mataas na presyo ng bilihin. Sana yung level ng energy na mayroon sa pagpupush ng wealth fund na ito ay mas higit pa para sa pagresolba ng isyu sa mataas na presyo ng sibuyas, itlog at iba pang agricultural products," she said.

(The country has a lot of problems that should be prioritized. These are problems that directly hit the Filipinos like the high prices of commodities. I hope that the level of energy that the administration exerts in creating the wealth fund is higher when it comes to resolving the prices of onion, egg and other agricultural products.)

'Investments in basic areas in agri, energy, climate change'

In an interview with reporters while on board a plane from Manila to Switzerland, Marcos said the proposed Maharlika fund will make investments in the basic areas of agriculture, energy, digitalization and climate change.

"Meron na tayong puwede pang pag-usapan na sovereign wealth fund. So sasabihin ko (We have something to talk about, the sovereign wealth fund. So I will tell them) exactly what's happened that we are forming a sovereign wealth fund for investments, for big investments in the basic areas such as agri, energy, digitalization, climate change — the point being is that now there is a wealth fund," he said.

Days before Marcos' trip to Switzerland, Foreign Affairs Undersecretary Carlos Sorreta said the proposed Philippine sovereign wealth fund will have a "soft launch" at the WEF.

Sorreta said it was Marcos' idea to tackle the wealth fund at the international conference.

In a statement released Sunday, Pimentel said the plan to tackle the MIF at the WEF is a "ploy to force the Senate into passing" the measure.

The House of Representatives already approved on final reading House Bill 6608 which seeks to create the MIF.

So far, there is no counterpart bill filed at the Senate.

Earlier, Senate President Juan Miguel Zubiri said they will wait for the House bill to be transmitted to the upper chamber.

The senators will seek a briefing with the Department of Budget and Management and the Department of Finance regarding the creation of the MIF.

The MIF bill seeks to maximize the investible funds of state-run financial institutions and ultimately increase public funds for nation-building.

The measure provides that the MIF would be funded by the investible resources of the Landbank of the Philippines (P50 billion), the Development Bank of the Philippines (P25 billion), and the dividends/profits of the Bangko Sentral ng Pilipinas.

The authors originally planned for the investible funds of the GSIS and the SSS to be included as sources for the proposed sovereign wealth fund's capital as well, an idea they later dropped after, said co-author Representative Stella Quimbo, pensioners expressed their concerns.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan earlier said he believes the establishment of a sovereign wealth fund is appropriate despite the risks of a global recession and high interest rates.

"The participation of funds like this as a vehicle for attracting resources is, I think, appropriate at this time," he said when asked if the economic conditions, given the looming global recession and high interest rates, were appropriate to establish the MIF, which could be tapped to finance the country’s economic development in the future.— Hana Bordey/AOL/RSJ, GMA Integrated News