‘Maharlika’ is back

Just a few weeks back, there was an official photo release of a ribbon-cutting ceremony to formalize the renaming of the presidential lounge at the Philippine Air Force (PAF) Base in Villamor in Pasay City. If not being used by the President, the lounge serves as the waiting area for VIPs (very important passengers) going in or out of the country instead of using the Ninoy Aquino International Airport passenger terminals.

The VIPs include visiting dignitaries as well as local VIPs who get to enjoy this privilege to use the presidential lounge at Villamor. After apparent refurbishments, it is now renamed “Maharlika” Lounge. A ritual blessing and ribbon-cutting by no less than President Ferdinand “Bongbong” Marcos Jr. (PBBM) capped the event.

Supposedly, the word “maharlika” means freeman or freed man) referred to the feudal warrior class in ancient Tagalog society in Luzon. In modern Filipino, however, the word referred to aristocrats, or to royal nobility. Except that in the Philippines, our local indigenous tribes – especially those in Mindanao – are the only ones who use nobility titles. However, there were even attempts to rename our country “Maharlika” in the past but never prospered.

It was the late TV emcee-turned Senator Eddie Ilarde who first proposed to rename the Philippines into “Maharlika” in 1978, citing the need to honor the country’s Malayan heritage before the Spanish and Americans occupation of the country. PBBM’s late father, former president Ferdinand E. Marcos also favored changing the name of the Philippines into “Maharlika” as a symbol of nationalism. In 2019, former President Rodrigo Duterte reiterated this idea, thinking that it means “more of a concept of serenity and peace.” But again, this did not get traction.

But lo and behold! Here comes another “Maharlika” being cooked by the 19th Congress.

A proposed legislation seeks to put up what is dubbed as the “Maharlika” Investment Fund (MIF) patterned from the sovereign wealth funds existing in Singapore, Malaysia, Indonesia, Australia, and Norway. House Speaker Martin Romualdez filed last Monday House Bill (HB) 6398 which seeks to create this sovereign wealth fund to replicate the success of such existing mechanism in these countries.

After the first reading of HB 6398 and referral to the House committee on banking and financial intermediaries, it quickly breezed through the panel the next day. Citing the endorsement of four major government financial institutions (GFIs) that will provide the “seed capital” for the proposed MIF, Albay Rep. Joey Salceda who headed the technical working group approved the draft bill for plenary debate soon.

Actually, Department of Finance (DOF) Secretary Benjamin Diokno revealed in our Kapihan sa Manila Bay last Wednesday the putting up a sovereign wealth fund (SWF) was conceptualized while he was still the Governor of the Bangko Sentral ng Pilipinas (BSP) during the previous Duterte administration. It was only last week that Diokno’s nomination as Finance Secretary got confirmed by the congressional Commission on Appointments.

Diokno declared the Philippines could put up its own sovereign wealth funds despite tight fiscal conditions of the government, including annual budget deficit and elevated debt stocks. As they originally crafted and drafted this bill, according to Diokno, the proposed SWF will set aside revenues from the country’s depletable resources from the exploitation of natural gas deposits, telecommunications bandwidths, and mineral resources. And, savings from foreign exchange remittances of our overseas Filipino workers (OFWs) which Diokno described as “closest to natural wealth.”

My neighbor in this page, Jarius Bondoc asked the same concerns I raised to Diokno during our news forum. If the idea is to pool together extra proceeds from dwindling resources, then why should two State banks and the two State-administered pension funds will provide the “seed capital” to start the MIF? To which Diokno justified as enabling these institutions to get more diversified options for investments.

A first cousin of PBBM, the Speaker picked up the proposed administration measure and was joined as co-author of HB 6398 by other presidential relatives at the Lower House. According to lawmakers who are supporting the bills, the fund will be patterned after sovereign wealth funds of 49 other countries including the Temasek of Singapore and the same instrument used by Malaysia despite its controversial 1Malaysia Development Berhad, which was plagued by corruption.

As envisioned in HB 6398, the sovereign wealth fund aims to allow the government to invest its surplus reserves or revenues in an array of both real estate and financial assets “to stabilize national budgets, create savings for their citizens, or promote economic development.” The fund and investments thereafter would be managed by the Maharlika Investments Corp. (MIC).

The governing board of the MIC shall be composed of nine members; six from the founding GFIs, two independent directors, and the Secretary of Finance will become the sole representative from the national government.

But as the head of the Cabinet socio-economic cluster, Diokno would like the “governing council” of the proposed MIF body should be “totally” controlled by the private sector. In this way, Diokno pointed out, the proposed MIF would be well managed and independent from the government. And most importantly, the Finance chief stressed, it should be out of reach by the President or by any politicians who can “meddle with the use of the funds.”

“And make sure this (MIF) will not be identified with any (sitting) President,” Diokno added.

Diokno disclosed the final form of the MIF bill would still undergo review by the inter-agency working committee that will be composed of the four GFI representatives, the National Economic and Development Authority, the Department of Budget and Management, and the DOF. Let’s wait and see how this newest “Maharlika” body will pan out.