'Just panic': Diokno allays fears Maharlika may lead to collapse of banking institutions

Job Manahan, ABS-CBN News

Posted at May 30 2023 02:30 PM | Updated as of May 30 2023 03:08 PM

Landbank of the Philippines. Handout
Landbank of the Philippines. Handout

MANILA — The Department of Finance (DOF) on Tuesday allayed fears the proposed Maharlika Investment Fund would bankrupt banking institutions, including Landbank, should it fail. 

Senator Aquilino Pimentel III in a TV interview said the failure of the Maharlika Investment Fund could lead to the possible collapse of banks tapped to become its fund source. 

This includes the Landbank of the Philippines and the Development Bank of the Philippines, he said, which were eyed to contribute P50 billion and P25 billion to it, respectively, based on the version of the Maharlika bill filed in the Senate. 

The Bangko Sentral ng Pilipinas will remit 100 percent of its dividends for 2 years to the fund. 

But Finance Secretary Benjamin Diokno said the premise "is just panic." 

"Ini-invest lang naman niya is 3 percent of its total investable fund. Actually ang investable fund niya is more than P1 trillion," Diokno told reporters in a chance interview. 

"Mga P50 billion lang ico-contribute niya and it will probably get higher returns compare sa current fund nila. 'Yun lang naman yon," he said. 

When asked if there was no need to worry about the issue, the finance chief said, "there is no basis for that." 


Diokno also responded to Senator Risa Hontiveros' criticism on the Senate's version of the Maharlika bill, after she raised there was a "backdoor provision" allowing government-owned and controlled corporations — such as the GSIS and the SSS — to invest in it. 

She said these GOCCs might "gamble" their funds in the MIF, most especially that board members of such agencies were appointed by the President. 

Diokno said the GSIS and the SSS would make their decisions based on the risks involved. 

"Kaya nga may mga board eh. While they are presidential appointees, they act in the best interest of the company katulad ng SSS. Ang trabaho niya is to make sure na yung kino contribute niya sa pension system ay napapalago niya," he said. 

"So mayroon kang options, A, B, C, D, E ganon.. sasabihin mo ang pera ko kino-contribute ko sa`yo, sa A." 

The official clarified while is not saying it was okay, "we do not want to preclude the board." 

"That is the board's decision."

President Ferdinand Marcos Jr. earlier certified as urgent the sovereign wealth fund's version in the Upper Chamber.

In a letter to the Senate dated May 22, 2023, Marcos cited a "compelling need for a sustainable national investment fund" amid "the downgrade of the global growth projection".

Senator Chiz Escudero earlier criticized the inclusion of Landbank and DBP as funding source for Maharlika. He said it would be better for those banks to lend to the agriculture sector instead.