Bayan Muna, Pimentel file petition vs. Maharlika Investment Fund

A petition has been filed asking the Supreme Court to declare the Maharlika Investment Fund (MIF) of 2023 as unconstitutional and void.

In a 56-page petition for certiorari and prohibition, the petitioners — Bayan Muna chairman Neri Colmenares, and former Bayan Muna Representatives Isagani Zarate and Ferdinand Gaite, and Senate Minority Leader Aquilino "Koko" Pimentel III — challenged the constitutionality of the MIF on three grounds.

Violation of economic viability

According to the petitioners, the MIF failed to satisfy the test of economic viability, which they said is among the limitations imposed by the Constitution to “ensure that government haphazardly relinquish its governmental functions without basis.”

The petitioners stressed that the Treasurer of the Philippines submitted a three-page business proposal for the MIF in an attempt to comply with the test of economic viability. The proposal said that MIF may generate a return on equity of around 6.51% to 10.78%.

“Although it is true that the Business Proposal of the Maharlika Investment Corporation reflected promising estimated returns for the next ten (10) years, the computation on which the estimated returns were based was not even provided in order for Congress, and also the public, to study and review such basis,” the petitioners said.

“With the simple submission of a three-page business proposal without the basis of computation of the return on equity, the requirement of economic viability will be easily circumvented,” they later added.

Violation of BSP independence

The petitioners said the MIF also violates the independence of the Banko Sentral ng Pilipinas (BSP) under Section 20, Article XII, of the 1987 Constitution.

In arguing that the MIF violates BSP’s independence, they cited Section 6 of the MIF which states that 100% of the BSP’s total declared dividends will contribute to the MIF for its first and second fiscal years.

Further, they said the Monetary Board is now ordered to contribute 100% of its dividends to the MIC.

“More importantly, the supposedly independent Monetary Board has to curry favor from the President and ask for his approval should they believe that their fiscal, as well as the economic conditions, merit the reduction of their contribution,” the petitioners said.

The petitioners said the MIF will create a “lasting if not permanent” connection between the BSP and the MIF which will then violate the independence of the BSP as a central money authority.

“Certainly under an advisory body and board of directors that are primarily political appointees, the Maharlika Investment Corporation cannot be run without political pressure,” they said.

“The Bangko Sentral is now obligated to earn not for itself but for the Maharlika Investment Corporation,” they later added.

Violation of three readings

Meanwhile, the petitioners said the presidential certification of the MIF bill in the House of Representatives and in the Senate did not comply with the requirements under Article IV, Section 26(2) of the 1987 Constitution.

The petitioners stressed that the requirements — the existence of a public calamity or emergency, the necessity of the enactment, and that such immediacy would justify doing away with the necessary legislative requirement — were all not present.

“The Court can take judicial notice of the fact that there was no declared state of calamity as defined by law which exists to necessitate the immediate passing of the Maharlika Bill,” they said.

They also stressed that the MIF itself failed to mention any calamity or emergency.

“The Honorable Court is asked to put to rest this regularly practiced grave abuse of discretion and ensure that this presidential prerogative be exercised only when the constitutional requisites for the exercise of that power are attendant,” they said.

In July, President Ferdinand "Bongbong" Marcos Jr. signed into law the MIF, which will tap state assets for investment ventures to generate additional public funds.

Pimentel previously batted for the recall of the MIF so that Congress could address its "glaring errors and discrepancies."

Marcos’ economic team, led by Finance Secretary Benjamin Diokno, is confident the MIF will boost economic development and speed up the country's growth, as they assure the public that it includes protective measures to ensure transparency, accountability, and careful monitoring of the fund's operations. 

In a message to reporters, Solicitor General Menardo Guevarra said the filing of such a petition is expected “in view of the public interest” generated by the MIF.

“The OSG has been keenly following the public debates about the fund to determine what legal issues of transcendental importance, if any, may be raised before the Supreme Court,” Guevarra said. —KBK/RSJ, GMA Integrated News