Late final month, the 2 homes of the Philippine Congress handed the controversial Maharlika Funding Fund (MIF) invoice amid ongoing criticism of opposition leaders, legal professionals, economists and civil society teams.
It took the Home of Representatives simply 17 days in December to go the MIV invoice. Responding to the considerations of unions, legislators DELETED pension funds as a supply of capitalization for the MIF. President Ferdinand “Bongbong” Marcos Jr. ratified the invoice as a precedence measure, permitting the Senate to expedite committee and plenary deliberations till it handed on Could 31.
Marcos has but to signal the invoice, however he’s anticipated to current it at his second State of the Nation tackle subsequent month.
Marcos and his allies in Congress might have succeeded in getting previous the MIF, however opposition to it continues to develop.
For instance, there was a dialogue paper published by 21 economics professors from the College of the Philippines (UP) urging Marcos to veto the MIF due to the “critical dangers” it poses to the nation’s future.
“In our view, the MIF violates basic ideas of economics and finance and poses critical dangers to the economic system and the general public sector – regardless of the nice intentions of its proponents,” they mentioned. One of many paper’s authors is a former authorities minister of socio-economic planning.
Marcos financial managers are largely UP graduates and former professors.
The 21 UP economists query the aim of the MIF, which was first introduced as a sovereign wealth fund. However because the nation has no important surpluses, they warned that it “essentially forces the MIF to siphon cash from different companies and public firms.” Certainly, state banks and the nationwide authorities will present the beginning funds for the MIF.
They argued that funds ought to be allotted on to improvement tasks.
“The MIF diverts treasured assets from the general public treasury — assets that might as a substitute be spent on numerous improvement tasks with extra sure or tangible returns, corresponding to conditional money transfers, diet packages, common medical health insurance, or energetic transportation tasks,” the newspaper mentioned. .
The UP economists additionally expressed concern over the MIF’s “ill-designed governance construction” and the danger of “political interference, mismanagement and corruption” because the president will appoint funding board members.
Lastly, they gave this recommendation to the federal government: “We should prioritize fiscal and monetary stability, transparency and prudence over speculative income and unsure monetary experimentation.”
Economist JC Punongbayan, who additionally signed the paper, explained in his on-line column that there isn’t a assure that the MIF will yield fast income. “The worldwide economic system isn’t in the very best form, with continued inflation, increased rates of interest and the continuing Russian invasion of Ukraine, which has resulted in international shock waves and disruptions. It’s a troublesome time to pursue investments with good returns,” he wrote.
Congressman Joey Salceda, one of many proponents of the MIF, insisted that the target of the fund – stimulating native improvement – is obvious. “If in some methods it takes on the traits of a mutual fund, it is just as a result of it should essentially be concerned within the monetary markets,” he mentioned in a media interview.
On June 13, the Marcos economics group launched an announcement to defend the MIF. “The MIF isn’t solely helpful, however needed at the moment,” it argued. “Whereas the Philippines might supply funding alternatives, on condition that we’re nonetheless a rising economic system, we see the price of debt rising, creating the necessity to discover autos to boost fairness financing.”
It claimed that the MIF “is a perfect car and effectively positioned to seize funding because the Philippine financial outlook stays sturdy amid the worldwide financial slowdown.”
However past convincing economists of the MIF’s viability, the Marcos administration should additionally be certain that the invoice, if signed into legislation, will go Supreme Courtroom scrutiny. Senate Minority Chief Aquilino “Koko” Pimentel III said that the “ill-considered laws” ought to be returned to Congress as a result of it’s “filled with opaque provisions, contradictions, ambiguities and loopholes”. His place is echoed by two former Senate Presidents who imagine the very best resolution is to submit the invoice for extra debates and amendments.
Senate President Juan Miguel Zubiri, for his half, does confident that the Senate model of the MIF “will entice funding, implement integrity safeguards, and generate advantages for the nice of society.” He additionally assured the general public that the invoice offers greater than sufficient safeguards to stop misuse of funds.
Marcos, who will quickly have a good time his first yr in workplace, should show that the MIF is what the nation wants right this moment amid rising costs and financial uncertainty. He would additionally should justify why billions of pesos shall be funneled into an funding plan as a substitute of utilizing the cash to broaden social companies and supply wage will increase, as demanded by a number of grassroots sectors over the previous yr.
