Supreme Court asked to declare Maharlika fund unconstitutional


Posted at Sep 18 2023 03:25 PM | Updated as of Sep 18 2023 06:00 PM

A petition asked the Supreme Court to declare the Maharlika Investment Fund unconstitutional and stop its rollout. Robert Mano, ABS-CBN News
A petition asked the Supreme Court to declare the Maharlika Investment Fund unconstitutional and stop its rollout. Robert Mano, ABS-CBN News

MANILA — A petition filed Monday urged the Supreme Court to declare the Maharlika Investment Fund (MIF) unconstitutional, with petitioners saying the law for it did not go through proper procedure.

The petitioners —Senate Minority Leader Aquilino "Koko" Pimentel III, Bayan Muna Chairman Neri Colmenares, and former Bayan Muna Representatives Carlos Zarate and Ferdinand Gaite — also want the High Court to stop the rollout of the sovereign wealth fund. 

The group argued that there was no public calamity or public emergency when President Ferdinand Marcos Jr. certified the bill as urgent. 

This meant that the measure violated the Constitution's requirement that bills go through three readings on three separate days before passage, the petitioners said.

Bills can be certified urgent to bypass that requirement, but only under specific circumstances.

"Maglalaan tayo ng pondo sa isang korporasyon na hindi natin alam kung kikita. Sa gitna ng walang ayuda at mataas na presyo ng bilihin eh maglalaan tayo ng hundreds of billions of pesos na hindi natin kilala kung sino mga director," Colmenares said. 

(We will pour funds into a corporation that has no certainty of making a profit. Despite the lack of aid and the rising prices of goods, we will allot hundreds of billions of pesos when we don't even know who will be the directors of the Maharlika Corp.) 

Colmenares also raised doubt on the independence of Maharlika fund managers. 

"Maaaring gamitin ang pondo na ito sa korapsyon o cronyism. Papaboran ang mga negosyante na kaibigan ng Malakanyang at masasangkot dito ang BSP (Bangko Sentral ng Pilipinas)," he said. 

(This fund could be used for corruption or cronyism. Businessmen and friends of Malacañang could be favored and the BSP would be involved, he said.)

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Marcos last week said the fund "is not run by the government; it is run by professional fund managers."

"That was always the concept behind it... because once the politicians get involved, then the decisions are no longer purely financial in nature. That causes failure, I think, and that does not make an efficient management of the fund," Marcos said. 

The P500-billion fund will draw most of its seed capital from the national government, including the central bank, gaming revenue and two state-owned banks. 

It will be allowed to make a wide range of investments, including in corporate bonds, equities, joint ventures and infrastructure projects. Private financial institutions and corporations will also be allowed to invest.

Marcos said the fund would help the government achieve its economic growth targets and reduce reliance on foreign borrowings to pay for new roads and bridges.

Activists and opposition figures have questioned the need for a sovereign wealth fund in the poverty-plagued country and raised concerns about the potential for corruption.

Business groups said the government was already running huge budget deficits and the proposed law risked downgrading its credit rating.

Conventional sovereign wealth funds are seeded by windfall government profits from natural resources, such as oil or minerals.

— With reports from Robert Mano, ABS-CBN News; Agence France-Presse