Malampaya earnings, loans eyed as sources of Maharlika fund

Government earnings or royalties from Malampaya gas field, loans and proceeds from sale of state assets may be tapped for the Maharlika Investment Fund (MIF), a lawmaker defending the bill said on Tuesday.

House banks and financial intermediaries chairperson Irwin Tieng of Manila,  made the confirmation during the interpellation of House Deputy Minority Leader France Castro of ACT Teachers party-list and House Assistant Minority Leader Arlene Brosas of Gabriela party-list.

Tieng cited Section 11 of the MIF bill which states that other sources of the MIF will include: “royalties  and/or special  assessments  on natural  resources  based on the fiscal regime to  be implemented by  the national government, proceeds from privatization of government  assets and public borrowings.”

“What the authors [of MIF] mentioned are royalties from oil exploration like Malampaya, as well as privatization of government assets like Pagcor (Philippine Amusement and Gaming Corporation)," Tieng said.

“We are just giving the MIF Corporation the flexibility, in case na kailangan natin. But it will still be subject to the approval of the advisory board and the MIF Corporation Board of Directors,” Tieng added.

Tieng sponsored the proposed measure in plenary under House Bill 6608.  The bill seeks to maximize investible funds of state-run financial institutions through investments with the aim of increasing public funds.  It will be run by the MIF Corporation to be headed by the president, the bill said.

Questionable

Castro warned against using the Malampaya earning for purposes other than what was stated in the law.

She said that under the law, the Malampaya fund should be spent for energy development projects.

“The Malampaya fund has already been used for the fertilizer fund scam. And public borrowings are even included as a source of funds...so apparently we are even allowed to borrow for the capitalization of MIF,” Castro said.

“Ipapatanggal natin itong royalties at public borrowings kasi delikado ito. Magkakaroon pa tayo ng loan para sa investment funding na ito eh taumbayan pa rin ang magbabayad nito,” Castro added.

Brosas agreed with Castro that the MIF fund sources are questionable, saying that such provision on royalties involving natural resources could also affect the royalty payments for indigenous people communities as provided for by Section 17 of the mining law.

The law states that “in the event of an agreement with an indigenous cultural community pursuant to the preceding section [requiring free and prior consent from the IP community], the royalty payment, upon utilization of the minerals shall be agreed upon by the parties.”

Under the same mining law, the said royalty will “form part of a trust fund for the socioeconomic well-being of the indigenous cultural community.”

“Hindi puedeng agawan pa nitong [MIF] ang ating mga IPs,” Brosas said.

(This fund cannot deprive the IPs of what is due them.)

Kid gloves

Kabataan party-list Rep. Raoul Manuel questioned the penal provisions of the measure that showed the seeming kid gloves treatment for erring individuals who cause MIF investment losses

“One to five years of imprisonment and P50,000 to P2 million fine [or both]. Bakit iyan lang. Bakit hindi perpetual disqualification from public office ang ipataw sa mandarambong?” Manuel said.

(Why are the penalties just these? Why not perpetually disqualify corrupt individuals from holding public office?)

“Given the worth [of money involved], magandang mapanagot ang mga kurakot sa bayan,” Manuel added.

In response, Tieng said that the MIF bill has enough safeguards.

“Ang magpapatakbo po nito ang ang pinakamagagaling na investors natin, kaya nga po ang minimum experience required ay 10 years sa banking and finance,” Tieng said.

(This will be managed by our best investors, that is why the minimum experience required is 10 years in banking and finance.)

“Hindi po tayo mag iinvest basta-basta para masiguro na safe iyong pera at maganda po ang tubo,” Tieng added.

(We won't invest our money haphazardly to ensure that our money will be safe and that we will have high yielding investments.)

Better version

Deputy Minority Leader Paul Daza thanked Speaker Martin Romualdez for listening to the inputs of House members in coming up with a "better version" of the bill.

“So, I would like to commend the sponsors, the leadership in listening
to the inputs, not just from this representation and other colleagues
but also from the public and the stakeholders. So, thank you for that.
I feel like this is now a much, much better version and I think it’s
something that I can support.  The answers were very clear and
addressed.  I think many of my concerns, in fact, I think the public’s
concern,” Daza said.

He further said that he "intends to vote yes" to the measure once it
is considered for second reading.

Earlier, the lawmaker warned that the bill's provisions would give the President too much control on where public funds should go.

"I am not persuaded. This will allow the President to manage a fund...[which are] the surplus, excesses from sale of large government assets. If we get the funding [from] the GAA [for this], that already usurps the power of the purse of Congress. You know how it is, if the President said he wants a P50 billion wealth fund... I don’t want to give up our power of the purse," Daza had said.

"We are on deficit spending, and it does not make sense that GAA will fund this. Let the GFIs do that. I’m sure it will be a major issue also for other members," he added.

Under the bill, the MIF will also be sourced from the investible funds of the state-run Land Bank of the Philippines (P50 billion), Development Bank of the Philippines (P25 billion), and the dividends and profits of the Bangko Sentral ng Pilipinas.

The MIF, Tieng said, will also yield a higher return on investment (ROI) rate of 7% to 8% which is higher than the existing ROI of the state-run financial institutions which is at 4%.—LDF, GMA Integrated News