MANILA — President Ferdinand Marcos Jr. on Monday said he has rejected a proposal to use a portion of the annual income of government-owned and controlled corporations (GOCCs) as seed capital to jumpstart the proposed Maharlika Sovereign Fund.
Marcos Jr. said that the idea of using GOCCs to put up the Maharlika Fund was “broached” his recent trip to the World Economic Forum, but he thumbed down the idea after consulting with his economic managers.
“We cannot use the funds with the GOCC… Pera ng gobyerno ‘yun. What will the government spend?” he told journalists.
“This is a lot of income that goes to the national government that will suddenly disappear, go to the Maharlika Fund and cannot be used for the government,” he said.
The President described the proposal as “too disruptive” as each GOCC may have to revise its charter to ensure that there would be no legal issues if a portion of its annual income would be pooled into the sovereign fund.
“I don't think that’s a viable proposition, at least not for us. Parang hindi bagay sa atin ‘yun,” he said.
“That’s why we are a little lukewarm about that idea,” he said.
The proposal cam from House Ways and Means Committee chairperson Joey Salceda, who also said that the Maharlika Fund should make its debut in the Philippine Stock Exchange.
“Upon IPO (initial public offering) it’s no longer a GOCC, it’s essentially another listed company in the Philippine stock market,” Salceda told ANC’s Headstart.
“It’s up to the President, but the recommendation is that the government will own less than 50 percent so it will be private basically,” he said.
Opposition lawmaker and Albay Rep. Edcel Lagman raised concerns about Salceda’s proposal.
“That fund, which represents the wealth of the state, should be controlled and owned by the state,” he said.
“It should not be transferred to the private sector through an initial public offering. It should remain a government-owned and controlled fund.”
Meantime, Marcos Jr. allayed fears that the proposed fund may be used to launder money.
“Private money will be involved in the fund but it's not a savings account that you just put it there and it stays there,” the President said.
“The Maharlika Fund will just serve as a seed fund for whenever we come into partnerships… Hindi ‘yan ‘yung bigyan ninyo ako ng ilang bilyon tapos ako na bahala,” he said.
“We will only deploy funds when there is a very specific project to pay,” he added.
The House of Representatives passed the Maharlika Fund bill on final reading in less than 2 months.
Earlier this month, Sen. Mark Villar filed a counterpart measure in the Senate, but did not include the “re-engineered” portions Salceda pushed.
When asked for a message to senators who are expected to tackle the Maharlika bill soon, Marcos said: “Suriin nyong mabuti. Hindi dapat imadali ang bawat salita, mas importante na maging tama kaysa mabilis.”
Senators "haven't had our official say" on the Maharlika Wealth Fund, Sen. Risa Hontiveros noted, adding that the proposal's soft launch at the World Economic Forum "was really premature."
"I'm afraid kasi there was nothing yet to present. They jumped the gun on this. I'm afraid it made the President look amateur," she told ANC's "Headstart" on Wednesday.
The Maharlika Fund aims to enable the debt-laden government to earn extra funds for huge infrastructure projects.
Critics noted sovereign wealth funds in other countries were typically seeded with surplus government revenues.
The Philippines’ debt was at around P13.6 trillion in November last year, while debt to GDP ratio skyrocketed to 62 percent in 2022 as government revenues fell due issues linked to the COVID-19 pandemic.