Retooling Maharlika

When I suggested that the taipans help kickstart the funding of Maharlika, it wasn’t done tongue-in-cheek. I really see it as the best option that allocates investment risk to the economic class best able to take it.

Done right, a national investment fund could address our urgent needs now caught in political and bureaucratic gridlock. But the authors of the Maharlika Fund bill are still grasping at straws to make it defensible because they may have other things in mind.

Using the pension funds raised public outcry that indicates high political risk.

Using the “profits” of the Bangko Sentral goes against the charter of the central bank to keep its focus on inflation and stability of our monetary system. Using BSP funds also puts the central bank in an untenable conflict of interest situation.

So called BSP “profits” are unpredictable. There are good times when it does have extra funds from operations. There are times when it uses up its resources to defend the peso or mop up excess liquidity in our financial system.

The BSP Charter also mandates building up the capital of the central bank so it is better able to perform its functions. Assigning “profits” to fund Maharlika is premature since it has some ways to go in its capital build-up.

Assuming the BSP has “profits” for funding Maharlika, that would deprive the National Treasury of funds it needs for government operations.

It is the same thing with using funds supposedly from profits of GOCCs. Those funds help bridge the fiscal gap. Without those funds, the Treasury will have to borrow more. That affects our country’s credit rating, specially after our COVID binge borrowings.

So, how do we fund Maharlika as painlessly as possible? Ask the taipans, the top 50 to 100 richest Pinoys, to invest in the development of their country.

There were comments sent to me that I should have also included the Marcoses as fund sources, citing the pending estate tax and other supposed hidden wealth of the Marcos family. That’s an obvious fund source, but we should let the Marcos family decide to help the country.

I didn’t want to make my proposal sound political and not for serious consideration. And I am serious about the taipans as funding sources. If the taipans throw their money in the fund, that should encourage the Marcoses to throw in some of theirs too. Nakakahiya naman kung hindi.

Now there are those who would say I am dreaming because the Marcoses have lost all shame. Well, we have to proceed on the assumption that they want to redeem their family name from historical oblivion.

Investing in Maharlika may even look like a convenient money laundering strategy for the Marcoses, but so what? The money will be flushed out of the shadows and used to help the country they share with us.

The taipans should sufficiently jumpstart the funding of Maharlika to make it a majority private sector fund. That gives us some assurance the fund will be used as intended. Having the government involved in funding it only opens it up for abuse by our unscrupulous politicians. They will see it as a pork fund.

The Maharlika bill being considered by Congress should go beyond funding. There should be provisions to make it easy for the Maharlika Fund to invest in projects. Think of provisions that cut red tape and invalidate outdated laws, national and local, that stand in the way of progress.

The Maharlika Fund should significantly invest in agriculture. Last year, agriculture only grew by 0.5 percent. Our population grew by 1.5 percent. There is no food security there.

Any entity the Maharlika Fund invests in should be exempted from the agrarian reform law, the big reason for our lack of agricultural productivity. The Maharlika Law should expressly provide this exemption.

An agricultural company funded by or in partnership with Maharlika should be able to easily consolidate land to allow for mechanization and economies of scale in rice and other crops.

Affected farmers will be guaranteed jobs that will put more money in their hands than they have experienced as “landowners”. They will also be compensated adequately for that piece of paper that they cannot even use to borrow seed money from a bank.

We have had good experience with corporates like Dole and Del Monte in managing large scale corporate farms. The bananas we export are also produced in corporate farms. This is how to use private capital to assure farm productivity that increases our food security.

Assign some corporations to take the lead in propagating specific crops and farm products. Universal Robina and Jollibee can take the lead for growing the potatoes and onions they need. San Miguel can lead in large scale modern poultry and piggery operations.

Maybe Maharlika can invest in Renucci Rice and Dona Maria rice so they can expand the production of high-grade rice. Invite foreign investors with experience in large scale rice farming who are willing to co-invest with Maharlika here.

Metro Pacific just made its first investment in agriculture by buying Jun Magsaysay’s Carmen’s Best. Maybe Maharlika can partner with MetroPac to expand the dairy industry in key areas of the country to reduce our import dependence and increase farmer incomes.

A high school classmate is the local processor for Del Monte Catsup. She said they are using imported tomatoes since the local tomatoes do not meet standards. Not sure if it is a question of our soil quality or lack of technology, but here is another farm produce with a ready market. A Maharlika investment on the farm side could displace imports and even produce exports of catsup.

Air21 is now an Ayala company. Maybe Maharlika can help it invest in a string of cold storage facilities nationwide to help farmers beat the traders and keep prices low for consumers.

We really do not have time to debate Maharlika to death. So many possibilities if we retool Maharlika so it can be used to help the country develop. Not sure if that’s what the sleepless President has in mind.

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco