Devil in the details

With the widely unpopular proposal to use pension funds and central bank surplus now deleted, and 20 other amendments introduced to placate opponents, President Marcos has given his full backing to the Maharlika Investment Fund or MIF.

BBM’s next six months will be starting with debates over what has turned out to be his baby after all – although why should people be surprised? The principal sponsors of the MIF are his son and cousin, and the name of the fund is a dead giveaway.

While the amendments persuaded several staunch opponents of the MIF to change their mind, however, the indecent haste in the approval of the measure has heightened suspicions about the nature of the fund.

The devil will be in the details as the ball is passed to the Senate. On the last session day of Congress before the Christmas break, the House of Representatives, a.k.a. the HOR, passed the bill creating the MIF.

The President, whose clan has a known fondness for the term Maharlika, certified House Bill 6608 as urgent all the way from Brussels, Belgium, where he was reported to be nursing a bad cold.

This allowed the HOR to pass the bill on second and then third reading in a record 18 days, with only six members voting against.

Senators have the Christmas break to ponder the merits of the MIF. If most of them stay true to form, however, the only merit they will consider is whether their vote will please Marcos. In the end, it’s a certainty that what the Maharlika wants, the Maharlika will get.

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The President is out as MIF chair, but his alter ego the finance chief and staunch wealth fund proponent Ben Diokno will likely get the post whose compensation will be so much higher than his Cabinet portfolio. And the guy whose name has been hissed about in the Palace snake pit as Diokno’s replacement can then assume the finance post.

So what happens now to all the concerns raised by numerous sectors, starting with the most basic: do we have surplus wealth to spare?

Bangko Sentral ng Pilipinas Governor Felipe Medalla has changed his tune, now saying that declared BSP dividends can be tapped for the fund without compromising the independence of the central bank.

We don’t know if the business groups will also make an about-face in their opposition, with warnings about the adverse impact on the country’s credit rating.

The amendments include provisions addressing concerns about corruption and mismanagement. Penalties have been introduced, but too light to allay the concerns. I guess this is so that the penalties won’t scare away competent folks from serving as the five independent directors who will help run the MIF.

The fund aims to “foster technological transformation” and “promote economic development by making strategic and profitable investments in key sectors.”

BBM indicated he wanted investments in domestic infrastructure, which means any profit to be made will have to wait possibly way beyond the end of his term. An investment banker said that while a sovereign wealth fund can be good, a country with such a fund must be prepared for losses in the initial stages.

The banker also pointed out that it took many years for the most successful wealth funds to be put together, such as the one in Norway that is sourced mostly from massive oil revenues.

In our case, even as details of the MIF are in constant flux, it looks like Congress and Malacañang will ram down our throats a sovereign wealth fund in three months.

There is still no final word on whether foreign investments are ruled out for the MIF. As many have pointed out, several of the world’s largest and best managed sovereign wealth funds have suffered massive losses this year.

MIF sponsors might yet prove the doubters wrong. But for now, people are asking: can our country mired in P13.52-trillion debt and facing spiraling prices afford to take the risk?

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The year is ending with public satisfaction with BBM’s governance lowest in managing inflation. At the wet market near my home last Saturday, red onions were selling for an eye-watering P380 a kilo. One stall was selling one golf ball-sized white onion for a whopping P98.

Refined white sugar price, despite the arrival of the entire 150,000 metric tons of imports over a month ago and the start of the harvest and milling season, refuses to go below P98 a kilo even at my suki wholesaler.

Prices of eggs, milk, butter and other dairy are also up. Price surges in food, non-alcoholic beverages and tobacco accounted for 8.2 percent of the 14-year-high 7.7 percent inflation rate last month. Cereals, flour, bread and confectionery accounted for 8.3 percent of the food inflation.

It won’t be long before the standard explanation (not entirely baseless) that inflation is imported starts wearing thin. Even heavily subsidized Kadiwa outlets will not suffice to allay public dissatisfaction.

Inflation is the dark spot in an otherwise generally bright first six months for the new administration. Now the rushed approval of the MIF bodes a contentious start to the new year.

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DETAILS: Last week a friend forwarded to me a news report in a foreign publication identifying someone else as “the editor-in-chief of The Philippine Star,” in both the text and photo caption. I don’t think the foreign publication could have plucked such details simply out of thin air. Knowing this to be fake news, I forwarded the story link to relevant authorities (and several other persons), with accompanying complaint. The story was subsequently corrected.

Another friend resent me a screenshot (which she first sent many months ago) of the wrongly identified person’s LinkedIn bearing “philippine star” over the profile. I forwarded the screenshot to a supervisor in protest over the misrepresentation. I understand this particular profile has been taken down… for now. Unlike in the print medium, anything can be deleted (and returned) instantly online. I don’t know how many others have the same feature in their online profiles, without authority from our newspaper.

I wrote last week’s article in hopes of putting an end to the confusion caused by this misrepresentation of The Philippine STAR by certain individuals. I don’t know if it will happen, however, considering the vitriolic drivel worthy of Duterte and the non-sequiturs unleashed in reaction to my article last week.

I thank friends who alert me about any misrepresentation when they can. Happy holidays, everyone!