EDITORIAL — Utmost deliberation

With billions in public funds at stake, and the independence of the Bangko Sentral ng Pilipinas at risk of being undermined, the Senate must fulfill its role of providing checks and balances to the executive and consider the plan to set up the Maharlika Investment Fund with utmost deliberation.

The MIF started as a sovereign wealth fund when it was passed within a record 17 days last December by the House of Representatives, just so the Philippine team could present something at the World Economic Forum in Davos, Switzerland in January.

Amid reminders that the Philippines has no excess wealth to invest in a sovereign wealth fund, and amid observations even by investment bankers that the exact nature of the fund is hazy, the proposal remains in flux, with only the term “Maharlika” unchanged.

Financial analysts have warned that if the measure is rammed down the throats of Filipino taxpayers in time for President Marcos’ second State of the Nation Address in July, the fund will be launched in a year when even the world’s largest and best managed sovereign wealth funds and several top banks overseas have suffered massive losses.

Concerns have also been raised about the insistence of the proponents to tap as Maharlika seed capital for the first two years all the dividends from the Bangko Sentral ng Pilipinas. The dividends form part of the BSP’s arsenal for maintaining the stability of the peso amid the global financial turbulence. A BSP official told the Senate that taking away the dividends would also delay the P200-billion capital buildup of the central bank, which is mandated under a law passed in 2018.

Apart from the BSP dividends, proponents want to get P50 billion from the Land Bank of the Philippines and P25 billion from the Development Bank of the Philippines as Maharlika seed capital. The economic team has been itching to control assets of the Landbank and DBP, which are already engaged in financing development projects in line with their specific mandates.

Farmers’ organizations have opposed the inclusion of the Landbank in the MIF. Its creation has raised concerns that the country could end up with a massive corruption, bribery and money laundering scandal similar to the one that landed former Malaysian prime minister Najib Razak in prison over his country’s sovereign wealth fund, the 1Malaysia Development Berhad.

Creating the Maharlika out of BSP, Landbank and DBP funds would mean putting together another layer of management with salaries that could trump those of the highly paid BSP governor and board members. If the government faces fiscal collapse, why is it creating a new and expensive management team for an investment fund whose stated functions overlap with those of the Landbank and DBP? The nation should remember those who will railroad this proposal.