Monsod warns Maharlika fund could be used as 'milking cow'

MANILA — Economist and professor Solita “Winnie” Monsod on Friday expressed concern that the proposed sovereign wealth fund would be used as a "milking cow."

"It's going to be a fantastic milking cow," she told ANC's "Headstart".

Should it be approved by lawmakers, the "Maharlika Investment Fund," which will be managed by a corporation, will be exempted to many laws, Monsod said.

Among them are the Salary Standardization Law, Government Procurement Reform Act, Philippine Competition Act and GOCC Governance Act, she added.

"Jesus, they got it all and they are going to be paid on international standards. They are exempt from these laws because they are going to be paid fantastically. Don't you think that's the milking cow?" Monsod said.

She also opposed the bill creating the MIF because the government has never been a "good manager."

She cited the controversial multibillion-peso coco levy fund.

The late dictator Ferdinand Marcos established the coco levy fund taxing farmers between 1973 and 1982. The fund was allegedly used by his cronies for investments for their personal gain.

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Congressional leaders have decided to revise the proposed law after concerns were raised over potential corruption and risks to workers' pensions.

Authors of House Bill 6398 will drop Government Service Insurance System and Social Security System as contributors to the sovereign wealth fund. They will also no longer allot money for the MIF in the national budget.

"Obviously, this sovereign wealth fund is not well thought of," Monsod said.

A group of economists and former government officials, which include Monsod, earlier urged lawmakers to scrap the bill. Proponents of MIF said it aimed to raise capital for big-ticket development projects.

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

The group said the government has a heightened fiscal deficit and the proposed law may also undermine the autonomy of government-run banks.

Critics also questioned the plan to designate the president as head of the fund's board.

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— With a report from Agence France-Presse