Pimentel: First hearing shows Maharlika Fund bill is 'defective'

The first Senate hearing on the proposed Maharlika Investment Fund (MIF) only revealed that the measure creating it is 'defective', Senate Minority Leader Aquilino "Koko" Pimentel III said Thursday.

"Lumabas lang kahapon 'yung dati na nating alam na depektibo talaga 'yung version na pinasa ng House, na pinasa naman sa Senado... Maraming hindi klaro, marami 'yung hindi nakasulat,"  Pimentel said during an online interview.

(The hearing yesterday only proved what I have been saying all along, that the version that was passed by the House of Representatives and transmitted to the Senate was defective... There are many provisions which are unclear and not written on the bill itself.)

Pimentel reiterated he will never support such a measure.

"Pinipilit lang natin kasi. Inanunsyo na natin na magtatayo ng sovereign wealth fund nang walang dahilan, walang source ng bagong kayamanan ng ating bansa. So, iniliko ngayon sa investment fund," quipped the Senate minority leader.

(They are insisting on its creation because they already announced their plan to create the sovereign wealth fund even if there's no reason to establish it and there is no excess government money. Now, they are calling it an investment fund.)

Asked if he thinks the measure will be passed by the upper chamber after Holy Week as stated by Senate President Juan Miguel Zubiri, Pimentel said, "Kahit anong oras ito, dapat hindi ito pumasa."

"We cannot defend the indefensible, save what cannot be saved. Kasi nga we cannot justify the unjustifiable," he added.

Pimentel also said that should the measure be passed, some of its parts can still be questioned before the Supreme Court.

Both the House and Senate versions of the bill creating the MIF provide tax exemptions, exemption from the GOCC Governance Act of 2011, exemption from Government Procurement Reform Act, and Salary Standardization Law.

"Yung ibang private businesses kailangan magbayad ng permit, withholding tax, income tax, lahat po. Si gobyerno magtatayo ng isang korporasyon na papasok din sa negosyo pero exempted sa lahat. Is that fair?" he said in a separate interview.

(Private businesses are required to pay for their permits and pay withholding taxes, income taxes, among others. Now, the government will create a corporation which will also run a business but it is exempted from all of these regulations. Is that fair?)

The same point was raised during the hearing Wednesday by Senator Sherwin Gatchalian.

"Isn't it giving undue advantage to private investors coming into these funds?" Gatchalian asked.

"If private investors will go to a normal mutual fund...they pay these taxes but with this...Aren't we, in a way, skewing profits, meaning, we are not reflecting the true cost of capital because we are exempting taxes from these funds? In other words, we are inflating profits because we are not paying taxes. 'Di po ba unfair advantage po 'yon?" he went on.

On Wednesday, the Senate committee on banks, financial institutions, and currencies conducted its first hearing on the proposed MIF.

Among the provisions questioned by the lawmakers were the composition of the board of directors which will manage the MIF, the exemptions from certain laws, and the weak penal provisions on graft and corruption.—VAL/AOL, GMA Integrated News