Maharlika Fund Law signing ‘a sad day in PH history,' says Koko

Senate Minority Leader Aquilino “Koko” Pimentel said the signing of the Maharlika Investment Fund Law is a "sad day" as reiterated his warning that the government will engage in risky investments.

“Today is a sad day in the history of our country, as the State through the Maharlika Investment Fund (MIF) will be engaging, unjustifiably, in an economic activity (risky investing) which is best left to the private sector,” Pimentel said in a statement.

Pimentel called this as “madness” as he reiterated that the creation of the fund is not well-planned.  He added the government has no excess funds or revenues that can be used to back up and fund the MIF, and that the use of money from state banks will disturb the status quo.

“The Maharlika Fund concept was developed on the fly. If it were an airplane, then it was built while flying it. Thus, the law has inherent contradictions because it was rushed. Nobody knows what creature we have created. It could turn out to be a monster, as it has been designed to be a super-GOCC,” Pimentel warned.

“The funds to be initially used are already existing funds under the care of conservatively run government banks. We are disturbing the status quo because the Government wants to take more risks with the money and gamble it, under their mantra of ‘more risks, more returns,’” he added.

Because of the ‘unclear origin’ of the idea of the MIF, the speed at which the law was enacted which involved ‘unconstitutional shortcuts’, and the ‘inherent contradictions and clear confusion’ in the law itself, Pimentel said the MIF will definitely be questioned before the Supreme Court on the following grounds:

-Defective presidential certification (No public emergency or calamity being addressed. Hence, no three readings on three separate days.)

-No showing of economic viability

-Undue delegation of legislative power (Surrender of the budget process by Congress; leaving to the IRR the determination of many important matters)

-Violation of substantive due process (Insists on being a sovereign wealth fund when it is not; inherent contradictions and confusion)

-Violation of Bangko Sentral ng Pilipinas independence

-The bill signed by the President was not the version passed by Congress (this we will call the “altered bill doctrine")

In a press conference earlier today, Senate President Juan Miguel Zubiri expressed confidence that the MIF Law can withstand any constitutional challenge before the SC.

Contrary to Zubiri’s claim that the MIF could prevent the Philippine government from borrowing to fund its infrastructures, Pimentel said the MIF Law “could significantly exacerbate our national debt” without the required surplus for the creation of a sovereign wealth fund.

“The MIF is a bad idea, a bad decision, a bad act… Hindi pa ba tayo napapagod sa kakaisip ng mga paraan kung papaano pa natin papalakihin ang utang natin?” Pimentel asked.

Earlier, Pimentel called on Marcos to veto the MIF bill. But with the signing of the measure, Pimentel said there is no other recourse but to challenge it before the SC.

“[T]o put a stop to this madness, the Maharlika Investment Fund Act must be challenged before the Supreme Court. Let us remind the powers that be that ‘MIF’ can also mean ‘Madness Isn’t Forever,’” Pimentel quipped.

National budget to bear brunt

Meanwhile, Senate Deputy Minority Leader Risa Hontiveros stood firm on her position that the Philippines does not need the MIF Law.

She said that the national budget will bear the brunt of the MIF as the dividends from state banks, particularly the Land Bank of the Philippines and the Development Bank of the Philippines, will decrease next year.

“Ang national budget ang unang magiging biktima ng Maharlika Fund. Ang dividends ng Land Bank at Development Bank of the Philippines, ang kita ng PAGCOR, pati na ang kikitain mula sa privatization program ng gobyerno ay mababawasan ng malaki sa 2024 at sa mga susunod na taon,” she argued.

She likewise hit Finance Secretary Benjamin Diokno’s involvement in the management of the MIF fund, saying the latter is “merely moving public funds around.”

“[F]rom urgently needed expenditures to to risky gambles; and from fund disbursements scrutinized and authorized regularly by Congress, to investments beyond the reach of elected representatives,” she said.

“With the time lost and political capital used up in promulgating the Maharlika Fund, especially since Mr Diokno and the President still insist that GSIS and SSS funds should still collaborate with Maharlika — Mr. Diokno has failed in his mission of using the mandate of the Administration to pursue tax and fiscal reforms and to keep the National Treasury well-funded. Nasayang ang unang taon nitong Marcos Presidency,” she said.

She recalled that during Marcos’ first SONA, the president has enumerated more expenditures than new revenue sources, “yet, few as there were, none of the new revenue sources have come into being.”

“Yet the Maharlika Fund took away GFI and GOCC dividends that could have been available for items in the President’s first SONA: regional specialty hospitals, Build Better More, potable water systems and even the recently passed condonation of debts of Agrarian Reform beneficiaries,” she said.

“Hindi po yan popondohan ng Maharlika Fund at hindi natin alam kung saan nila kukunin ang panustos. No thanks to the President and his Finance Secretary,” she added.

'Floodgates for corruption'

House Assistant Minority Leader Arlene Brosas of Gabriela party-list said the MIF law will just open the floodgates for corruption.

“The bill is economically unsound, and contains legal loopholes that can facilitate graft and corruption. Lack of clarity and defined boundaries regarding the Board of Directors' powers and authority can lead to unchecked discretion and absolute decision-making, which is extremely dangerous," Brosas said in a statement.

Brosas cited that the law allows Marcos to easily appoint and control the MIF's Board of Directors.

“With the government's track record of not being transparent in terms of handling funds, we cannot trust it in handling P500 billion worth of public funds which could have been used for social services," Brosas pointed out.

"With reports of the Philippines losing around P700 billion annually to graft and corruption, investing such a significant amount of money from depleted public funds will definitely impact the lives of ordinary Filipinos who are already reeling from the effects of the economic crisis today," she added.

Brosas then argued that there are other pressing issues that demand priority in terms of public funding such as significant wage increase, supporting jeepney drivers in their call for subsidies, and genuine public housing.

“Maharlika scam is not the solution to the burden of our people,” Brosas added.

Earlier today, Marcos signed into law the MIF bill which seeks to tap state assets for investment ventures to generate additional public funds.

GMA News Online has reached out to Malacanang for its reaction but has yet to receive a response as of posting time.—LDF, GMA Integrated News