Urgency to pass Maharlika fund 'very disturbing', says nat'l scientist in economics

Jessica Fenol, ABS-CBN News

Posted at Dec 12 2022 12:12 PM | Updated as of Dec 12 2022 12:58 PM

MANILA - The urgency to pass the Maharlika Fund bill is "suspicious" and "very disturbing," a National Scientist in Economics said Monday, as he noted that talks of sovereign wealth fund only gained traction during the Marcos administration. 

"We had sovereign wealth fund bills in the past. They did not get traction at all, it got traction only when BBM become president and the Speaker of the House is of course very close. It gives you a lingering suspicion that something is being rushed before we wake up. That’s is very, very disturbing," National Scientist in Economics Raul Fabella said in an interview with ANC. 

House Speaker Martin Romualdez, President Ferdinand Bongbong Marcos Jr's cousin, has led several lawmakers, including presidential son Ilocos Norte 1st District Rep. Sandro Marcos, in filing House Bill 6398 seeking to establish the country's first sovereign wealth fund

Albay Rep. Joey Salceda was even quoted saying "kailangan namin ng tulong. Utos ng pangulo to" (we need help since the President ordered this) during the deliberations of the bill by the House Committee on Banks and Financial Intermediaries.

But lawmakers should start from scratch in the Maharlika Wealth Fund or better yet scrap the proposal, Fabella said. 

"With respect to the Congressional law or bill, which is bound to pass, my own feeling is that it should be scrapped, if not scrapped, we should fight in the Senate to have it properly done or scrapped even in the Senate. There are many other problems that we have to face," he said. 

"In the Philippines, the concentration of funds tends to disappear because of our weak rule of law," he added.

Fabella cited the Malampaya fund, which he said could have been "a proper fit" but was embroiled in the fertilizer scam, a controversy which no high-ranking official has been held accountable for. 

Fabella earlier said the MWF is beyond repair since "no other layers of firewall will correct the concept."

"Before a project could become shovel-ready, it has to be situated in a proper regulatory and rule of law ecology…If the rule of law ecology is adequate the risk-adjusted returns will become attractive to market players and there is enough resources from market players to fund those projects," he said.

Proponents earlier revised the proposal following a backlash on the use of pension funds in the Government Service Insurance System and the Social Security System as funding sources.

An economics professor on Monday also said the Bangko Sentral ng Pilipinas should be allowed to grow its capitalization to P200 billion first which was mandated by law in 2018, before it should be required to fund Maharlika.

Analysts and critics have also stressed that the success of a sovereign wealth fund largely relies on the credibility of its managers and if it is corruption-free.

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