June 1, 2023
MANILA – The looming passage of the bill creating the Maharlika Investment Fund will be a litmus test for the administration of President Marcos.
It is not lost on many Filipinos that the Marcos family has been inextricably tied to the sins of its previous generation, especially through its actions and inaction that eroded the country’s standing from being the second most dynamic economy in Asia in the middle of the 20th century to a basket case by the time the family had fallen from power.
It is because of this past pillage of the Philippines’ coffers that doubters of the present dispensation have criticized the proposed sovereign wealth fund, which its backers in Congress want created ostensibly to help manage public resources for the benefit of the Filipino people.
Despite the country’s history being replete with jaw-dropping examples of state mismanagement, or sometimes outright theft by people in power, of the Filipino taxpayers’ money, the eventual enactment of the administration’s most consequential economic policy to date is all but certain. While Senate Minority Leader Aquilino “Koko” Pimentel III and Sen. Risa Hontiveros have put a valiant effort against the hasty passage of the measure in the chamber, the political reality is that the administration-allied majority has the overwhelming numbers to pass the bill before the adjournment of sessions this week.
The Maharlika bill, which Mr. Marcos has certified as an urgent priority measure, is expected to be presented as a major accomplishment for his State of the Nation Address in July, thus the seeming move to railroad its approval, notwithstanding the fund’s viability, management, and many other issues.
The proposed sovereign wealth fund is all but a done deal, as far as Congress and the Marcos administration are concerned. Critics of the measure—both those who are well-meaning, as well as those who simply criticize for the sake of criticizing—have done what they could. But their efforts have fallen short, and the measure is on the cusp of becoming a reality.
As such, the attention and energy of every good governance-loving Filipino must now turn toward ensuring that this scheme meant to grow the country’s sovereign wealth is used properly and prudently.
Indeed, public clamor has already caused its proponents to improve the bill better by excluding the dollar reserves of the central bank and the assets of both government and private pension funds from the pooled resources that will be invested.
Lawmakers working with economic managers in the Cabinet have also promised several layers of safeguards which will help protect the integrity of the billions of pesos that will be invested in national projects and other ventures of high growth potential, both here and abroad.
These protections include the selection of a professional, nonpolitical manager to run the fund, a board of directors appointed by the president and a board of advisors to make sure that the resources are being invested properly, and a slew of audits to make sure that the funds are going where they should. These are all good things.
We’ve said it before, and we’ll say it again: The key to making this sovereign wealth fund—or any other country’s sovereign wealth fund, for that matter—a success is to have it run by professional managers and insulate them from the vagaries of politics.
Of course, that can be done in theory by packing the proposed law and its subsequent implementing rules and regulations with provisions on the proper selection of the fund’s leaders and managers. But, in this country, no such safeguards provide absolute guarantees against misuse especially when the time comes that Filipino politicians with ill intent bring their crafty minds to bear.
Filipinos should now carefully monitor what happens in the bicameral conference committee where the Senate and House bills will be harmonized, as this stage tends to be venue for horse trading, compromise, and last minute insertions that can subvert even the most well-crafted of laws.
In the end, safeguards in the law can only do so much to protect the wealth of the country against misuse. It is incumbent upon the country’s political leaders to ensure that such a vehicle that will hold billions upon billions of pesos will be used properly and only for their intended purpose which is to fulfill Filipinos’ aspirations for a better life.
Everyone must now help ensure that the Maharlika Investment Fund will work and that it will work for the benefit of everyone and not just a few, as has been the case so many times in this country’s history when massive resources are put in the hands of a small group of people with too much discretion and not enough accountability.
For the President, this is the ultimate litmus test. For the nation’s sake, we don’t want a repeat of history where billions upon billions of the country’s wealth were squandered.