SC asked to nullify Maharlika

MANILA, Philippines — Lawmakers yesterday filed a petition before the Supreme Court asking that the Maharlika Investment Fund (MIF) Act of 2023 be declared unconstitutional and void, as they argued that the passage of the law “bypassed” the constitutionally mandated legislative process.

Senate Minority Leader Aquilino Pimentel III, Bayan Muna chairman Neri Colmenares and former Bayan Muna representatives Carlos Zarate and Ferdinand Gaite filed the petition.

Executive Secretary Lucas Bersamin, Finance Secretary Benjamin Diokno, the House of Representatives and Senate were listed as respondents.

The passage and contents of the law violated three sections of the 1987 Constitution, according to the petitioners.

In the 55-page document, the group alleged that the passage of Republic Act 11954 was “not duly enacted” in accordance with Article VI, Section 26 (2) of the 1987 Constitution, which provides that no bill passed by either chamber of Congress shall become a law unless it has passed three readings on separate days, except when the President certifies to the necessity of its immediate enactment to meet a public calamity or emergency.

The petitioners argued that the constitutionally mandated legislative process was “short-circuited” through unnecessary and constitutionally infirm presidential certification of urgency.

The presidential certification allowed the House to pass Bill 6608 on second and third reading on Dec. 15 last year.

The petitioners, however, pointed out that even after all the rush to pass the then Maharlika bill last May 31 in both houses of Congress, it was only on July 4 that they enrolled the bill to the President. This belied the urgency of the immediate enactment of the law as claimed in the presidential certification of urgency.

They also noted that some members of Congress tried to amend the bill already approved and adopted by the Senate and by the House last May 31.

They said this was “a constitutionally fatal act in the passage of the law.”

The petitioners likewise alleged that the establishment of the MIF, as a government-owned and controlled corporation (GOCC), “failed to satisfy the test of economic viability” as mandated under Article XII, Section 16 of the 1987 Constitution.

This provision states that the common good and economic viability requirements must be met before Congress can form GOCCs.

During the passage, a three-page business proposal for the MIF was submitted showing promising estimated returns for the next 10 years.

The petitioners, however, argued that a business proposal does not satisfy as proof of economic viability.

“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,” the petition stated.

The petitioners also alleged that RA 11954 violated the independence of the Bangko Sentral ng Pilipinas as provided under Article XII, Section 20 of the Constitution. The section also provides that the BSP serves as an independent central monetary authority.

Under the MIF, however, the BSP is ordered to contribute 100 percent of its dividends to the Maharlika Investment Corp.

“The Monetary Board, therefore, despite its power to determine its policies, is now subjected by the law, to the discretion of the President,” the petition read.

“By virtue of RA 11954, the dividends that should have been used to recapitalize the Bangko Sentral ng Pilipinas will now be used as a part of the capital of the Maharlika Investment Corp.,” it added.

The MIF was signed into law last July 18, being the first-ever sovereign wealth fund of the country.

Minority backs petition

House minority members yesterday backed Bayan Muna’s move to question the MIF’s constitutionality and validity before the SC.

The “challenged Maharlika Law lacks fiscal and economic wisdom and is ill-timed because of the negative economic indicators besetting the country today,” according to Albay 1st District. Rep. Edcel Lagman.

“While I am consistently opposed to the establishment of the Maharlika Investment Fund and I share the sentiments of those who petitioned the Supreme Court to declare the Maharlika Investment Act unconstitutional, I already previously said that there appears to be no constitutional provision violated in the process of enacting the Maharlika Investment Act,” Lagman said.

Gabriela Women’s party-list Rep. Arlene Brosas also supported the petition, noting that the grounds cited in the petition “raise significant questions about the legality and legitimacy of the law.”

Brosas was referring to the violation of Article VI, Section 26 (2) of the 1987 Constitution and the failure to comply with the test of economic viability mandated under Article XII, Section 16 of the Constitution.

“The presidential certification of the Maharlika bill should comply with the requirement that its immediate enactment is to ‘meet a public calamity or emergency.’ Additionally, the economic viability of the investment fund should have been thoroughly assessed before its creation,” she said.

The lawmaker maintained that the BSP’s independence was violated as the agency is one of the funding sources of the MIF.

She said the arguments presented in the petition “warrant serious consideration” as she expressed hope that the high tribunal will thoroughly review the MIF’s constitutionality.

For ACT Teachers party-list Rep. France Castro, the filing of the petition is a “good development,” considering that the MIF law is “farthest from what our people need.”

“It will not lower the prices of goods, it will not increase the wages of workers and it will not provide free land to farmers,” Castro said.

“Most likely, it will only deplete funds that should be better spent in uplifting the lives of the poor, like for ayuda (aid) and pabahay (housing),” she added.

Albay 2nd District Rep. Joey Salceda said it is the right of those questioning the MIF’s constitutionality to take any legal recourse.

“But I argue that the MIF Act is akin to the creation of any other government financial institution or government corporation. The Supreme Court tends to give congressional action on such matters wide latitude and tolerance,” Salceda added.

Measures were taken, particularly by the House, to make sure that safeguards are in place and constitutional requirements met, according to the Bicolano lawmaker. — Sheila Crisostomo