GOCC or not? Senators debate Maharlika committee referral

The debates have begun among senators on the Maharlika Investment Fund (MIF) bill even before a formal public hearing is convened.

The brief exchange of opinions during Wednesday's session centered on the committee referral of the measure.

Senate Minority Leader Aquilino "Koko" Pimentel III argued that the bill on MIF should be referred to the committee on government corporations and public enterprises instead of the committee on banks, financial institutions and currencies.

"I think that the proper, correct primary committee for these two bills, which actually talk about the same issue of the creation of the Maharlika Investment Corporation to manage a fund,  I think the correct and proper committee to be the primary committee would be our Committee on Government Corporations and Public Enterprises," he said.

"Undoubtedly, the two bills create a GOCC (government-owned and controlled corporation), but it does not create a bank, it is not about currency, but is it about the third subject matter of financial institutions under the committee that we referred it to? Hindi po," he added.

Pimentel explained that the definition of a financial institution, under the existing laws, is an institution which is under the supervision of the Bangko Sentral ng Pilipinas (BSP).

"That is a quasi-bank or an institution similar to a bank. That is an institution which deals with the public, so that money collected from the public is directed to those in need of funding," he explained.

Pimentel moved to "correct" the referral of the bills on MIF creation.

But before the body acted on the motion, Senate President Juan Miguel Zubiri said that the main committee which crafted the MIF bill in the House of Representatives is the counterpart panel of the Senate committee on banks, financial institutions and currencies.

"If I’m not mistaken, what is being established here is a financial institution of government. It’s a funding source, it will be used for funding mechanism. And therefore, on the face of it all, it seems more appropriate to leave it with the Committee on Banks and FInancial Institutions," Zubiri said.

"Government corporations are more or less if we are going to set up a new GOCC... and create a charter. We’re not creating a charter in this Maharlika Wealth Fund," the Senate president added.

However, Pimentel pointed out that the Senate is not bound by the actions of the House.

He reiterated that it is "safer" to refer it to the committee on government corporations and public enterprises as the bills basically create the Maharlika Investment Corporation which will manage the fund.

"We are creating the Maharlika Investment Corporation to manage the fund. That is what is clear from the two bills. What is clear is it’s not a bank, it’s not about currency, is it a financial institution? Ito po hindi e," he said.

Senate Majority Leader Joel Villanueva, who is in charge of the referrals of the bills to the committees, cited Rule X of the Rules of the Senate which provides that the jurisdiction of the committee on government corporations and public enterprises involve all questions affecting government corporations, including all amendments to their charters, the interest of the government in the different industrial and commercial enterprises, and privatization.

He then cited provisions of Senate Bill 1670, Senator Mark Villar's version of the MIF bill.

"If you look at the bill itself, other [Government Financial Institutions] and GOCCs may be authorized to contribute to the MIF subject to their respective investment and risk management strategies. This is the main reason why the body decided to refer this particular measure to the committee on banks, financial institutions and currencies," he said.

Villanueva said the committee on government corporations and public entities will still be part of the referral as the secondary committee.

Zubiri agreed with Villanueva's point, saying: "In other words, what you’re saying is mas tugma. Mas tugma ang committee ng banks and financial institutions and currencies na i-refer don sa committee... na yan."

Still, Pimentel said the provisions on the sourcing of funds to create the MIF, which was read by Villanueva, support his position that the bill was indeed creating a GOCC.

"Precisely, it identifies the source of the initial capitalization of this entity that these measures seek to create, that’s why it makes them a government institution. Ang pera galing sa pera ng government institutions din," Pimentel said.

"All the more that the sections read by the majority leader support our position that we are creating a government corporation called the Maharlika Investment Corporation because we cannot have a fund, there is no manager of the fund. It’s the corporation which manages the fund," he went on.

At this point, Zubiri pointed out that the "primordial concern" of the bill filed by Villar is the establishment of the fund and the succeeding sections were written so they can establish a body that would manage the sovereign wealth fund.

"So if you look at the priorities, it’s the establishment of the fund. Therefore, the primary committee really to handle is banks and financial institutions, secondary ang government [corporations and public enterprises.] That is my reading of this bill and that's also what had transpired in the House of Representatives," Zubiri said.

For his part, Senator Francis Tolentino said it should not be referred to the committee on government corporations and public enterprises as there is no existing GOCC yet.

"In this case, Mr. President, there is no government corporation in existence which would handle the Maharlika Investment Fund. No amendments to a government corporation in existence would be under the jurisdiction of the committee," he said.

"The mere mention of GFIs, which is still a work in progress, would not be sufficient to lodge specifically on the said committee the Maharlika Investment Fund," he added.

The Senate chief suggested the body to vote on Pimentel's motion.

But before voting on the motion, Pimentel emphasized that the bill can say it's just the creation of a fund but it will not "function without decision makers."

"The more critical [factor] here is the Maharlika Investment Corporation. If there’s a fund, nobody manages the fund, so what happens? So its the corporation that is important," he said.

Senate Deputy Minority Leader Risa Hontiveros backed Pimentel in moving for the changing of the committee referral of the bills on MIF.

However, they lost as 19 senators voted against it.

Senator Pia Cayetano abstained from the voting, explaining that she was not able to ask her brother, Senator Alan Peter Cayetano who chairs the committee on government corporations and public enterprises, if he is willing to shepherd the passage of the measure in the upper chamber.

In closing the discussion on the MIF bills' committee referral, Zubiri said that any senator is capable of hearing the MIF bill with "professionalism and dedication."

"It's a matter of referral and nothing to do with the chairman," Zubiri said.

Pimentel said the committee chairman will also play a vital role in the passage of the measure because he or she is the one who will schedule the hearings, call the resource person and draft the committee report.

Over the weekend, Zubiri said he expects that the MIF bill in the upper chamber will be passed by the chamber on final reading after the Holy Week.

However, Pimentel and Senator Sherwin Gatchalian voiced their concerns on the measure.

The proposed measure has been certified as urgent by President Ferdinand “Bongbong” Marcos Jr., allowing Congress to approve it on second and third reading on the same day.

Among its authors are House Speaker Ferdinand Martin Romualdez, and Ilocos Norte 1st District Representative Ferdinand Alexander “Sandro” Marcos III, cousin and son of the President, respectively.

It is also backed by the government’s economic cluster led by Finance Secretary Benjamin Diokno.

The House of Representatives approved the MIF on third and final reading last December, with dividends from the Bangko Sentral ng Pilipinas (BSP) and state-run banks dropped as possible funding sources according to Albay Representative Jose Maria “Joey” Salceda.

A counterpart measure has been filed by Senator Mark Villar, who was with Marcos in his recent trip to Davos, Switzerland.

Last week, Marcos touted the MIF in his opening remarks at the Philippines Country Strategy Dialogue in Davos. He also said the measure would fund critical infrastructure projects.—LDF, GMA Integrated News