I’M GLAD to have received valuable feedback from readers from here and abroad about my “Maharlika Wealth Fund brouhaha” column published last week. In fact, the feedback was overwhelming because I was retweeted on Twitter more than once, fancy that! Little joys do make us happy!
I understand from latest news reports that because of scathing public criticism, House lawmakers have introduced modifications to the highly debated bill. I guess the pressure really hurts, huh!
For further study and appreciation of the Maharlika Wealth Fund (MWF), I suggest you read “[Analysis] On the Maharlika Wealth Fund by Antonio T. Carpio” published last week. You can google it for easy access.
Accordingly, under the revised version of the bill, the Government Service Insurance System (GSIS) and Social Security System (SSS) have been removed as sources of seed money for Maharlika and rightly so. If you read Carpio’s analysis, you will discover that the “SSS’s Audited 2021 Condensed Statement of Financial Position shows a “Total Reserves/Equity” of NEGATIVE (P6,095,489,996,675) [equivalent to US$10.69 billion]” while “GSIS’s Audited 2021 Statement of Financial Position shows a “Total Equity/(Deficit)” of NEGATIVE (P560,612,751,193).” Isn’t that staggering information?
According to Carpio, the SSS and GSIS are in “precarious financial positions” and, to borrow his words, “should not be wantonly raided by Congress for scarce investible funds” to be used by the Maharlika Investments Corporation.
Carpio urged Congress instead to provide additional equity to SSS and GSIS annually to address these deficits. That’s sound advice considering that the “bulk of retirement benefits of government and private sector workers are sourced from the SSS and GSIS.” Do I need to add more?
In a related story, it is very timely and relevant to come across the full “Statement of Economic Managers on the Creation of the Maharlika Wealth Fund” calling for the scrapping of the MWF bill or House Bill (HB) 6398! Now, the plot thickens!
The statement said, “the MWF is a warped version of what the SWF should be. Sovereign wealth funds usually solve a problem of excess.” What excess are they talking about? Let’s illuminate: “excess revenues in a situation of consistent large budget surpluses, windfall revenues from booming extractive industries, and excess foreign currency reserves from enduring balance of payments surpluses, which are invested abroad to help stem currency overvaluation.”
However, the economic experts argued “the Philippines does not enjoy such excess” but maintains “a heightened fiscal deficit, has a so-so export performance, and has not enabled the major commodity exports to bolster foreign currency reserves.”
The statement asserts “the administration’s goal of promoting infrastructure spending can be more efficiently facilitated through annual appropriations, concessional lending, or public-private partnerships (PPP).” Indeed. The national government has made a big splash out of PPPs in the past. Don’t tell me it doesn’t work now!
Furthermore, “The Maharlika scheme is essentially a “behest” transfer by ordering entities like the GSIS (removed in revised bill), SSS (removed in revised bill), Development Bank of the Philippines, Land Bank of the Philippines, and the Bangko Sentral ng Pilipinas to participate by quota when there is no inherent reason for these to do so” which in effect “undermines the autonomy of their investment decisions and preempts their portfolio choices, not necessarily in an optimal fashion.” Now as a nation, I believe we have had enough of anything ‘behest’ in our history. We’ve been there and it didn’t do us any good.
It added, “A sovereign wealth fund should mitigate the impact of volatility and unpredictability while enabling a nation to achieve its long-term macroeconomic objectives.” It said further, “The rules of the game — the institutions, governance, and incentives — that define HB 6938 run counter to principles of prudential regulation and risk management, conflict-of-interest avoidance, transparency, and accountability, and underscored that “This muddled, inconsistent, and redundant bill is only setting the MWF up for failure, and will only enable cronyism, rent seeking, and corruption.”
What struck me most are the words ‘run counter to principles.’ These are the experts talking. They have years and years of experience, wisdom, and foresight.
I believe what the country needs now are patriots – like you and me – who will say “No” to this bill.
Let’s stick to the proven principles, mechanisms, and programs that have shaped and carried us through better days and not succumb to swallowing something rammed through our throats.
For the full statement, visit www.pids.gov.ph/details/news/in-the-news/statement-on-the-maharlika-wealth-fund.
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Writer hosts Woman Talk with Belinda Sales at 91.1 Balita FM Tagbilaran City every Saturday, 4 p.m. to 5 p.m. She can be reached at belindabelsales@gmail.com. Twitter @ShilohRuthie./PN
