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Thursday, March 28, 2024

Senate sets MIF deliberation, ‘fine-toothed comb’ scrutiny

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Senate President Juan Miguel Zubiri said the Senate might begin deliberations on a bill creating the Maharlika Investment Fund (MIF) by February next year, noting that all bills passed by the House can only be referred to the Senate on Jan. 23, 2023 after the recess.

Zubiri said the bill would then be referred to the committees on banks, financial institutions and currencies, government corporations and public enterprises, ways and means, and finance.

It would then be up to the committee chairmen to schedule hearings, most likely by the middle of February.

“We respect the committee system in the Senate, and we will study through the hearings and plenary debates all measures with a fine-tooth comb to make sure every bill or proposal would be good for our people and our country,” he added.

Zubiri also emphasized that the speed of the passage of the MIF bill will depend on how the committee chairman, Senator Mark Villar, will shepherd the deliberations on the measure.

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“The speed of the passage of the measure is dependent on the ability of the chairman and the quality of work that is put in during the hearings and debates. That is how it is in the Senate and that’s how it’s always been in this institution,” he said.

Earlier, Zubiri said he already told President Ferdinand Marcos Jr. that the MIF bill will undergo rigorous discussion in the Senate.

On Thursday, the House of Representatives passed on third and final reading the MIF bill after the President certified it as urgent.

The President’s sister, Senator Imee Marcos, said the Senate will scrutinize the measure with the “panel” earlier set up by Zubiri.

The special panel is composed of Senators Juan Edgardo Angara (committee on finance chairman), Alan Peter Cayetano (government corporation and public enterprises committee chairman), Sherwin Gatchalian (ways and means committee chairman), Grace Poe (economic affairs committee chairperson) and Mark Villar (banks, financial institutions, and currencies committee chairman).

Senate Minority Leader Aquilino Pimentel III emphasized the need to fully examine the Maharlika bill.

“We have to make sure that the Maharlika Fund Bill will be thoroughly discussed in the Senate. We must examine everything in the said bill.

Even the commas, semicolons, and periods,” Pimentel said in a text statement.

“Haste makes waste. That applies to both the bill and the funds that may be managed by the entity created by the rushed bill,” he added.

Senator Risa Hontiveros said she was surprised by the President’s decision to certify the Maharlika bill as urgent, noting there were more pressing concerns such as inflation, low wages, and assistance for solo parents.

“This Maharlika wealth fund is premature, and a misplaced priority,” she said. “It will distract us.”

“Our economy is already hurting now, imagine the world of pain we’ll be in if we rush headfirst into a P250-billion mistake,” Hontiveros said.

Also on Friday, Speaker Martin G. Romualdez said the House of Representatives has increased the amount earmarked from the profits of the Maharlika Investment Fund (MIF) for social welfare purposes or subsidies from 20 percent to 25 percent as proposed by an opposition lawmaker.

“We have increased the contributions of the profits of the Maharlika Investment Fund to social welfare funds that the government can utilize to provide assistance to those who need it the most,” Romualdez said.

Romualdez noted that such an increase came from a proposal of the opposition bloc in the House, although they later voted against the passage of HB 6608.

“This amendment was proposed by the Makabayan bloc, which we accepted,” Romualdez added.

Meanwhile, the Governance Commission for Government-owned and Controlled Corporations said the government financial institutions funding the MIF have sufficient capital strength to bankroll the sovereign wealth fund.

“Generally, our government financial institutions are financially healthy and viable based on publicly available financial information
as of June 30, 2022,” said GCG Director Lovely Joy Avisado at a press briefing.

“The GOCs involved in the Maharlika Investment Fund are compliant with the 10 percent capital adequacy ratio required by the Bangko Sentral ng Pilipinas (BSP),” Avisado said.

But former Supreme Court senior associate justice Antonio Carpio and several former government officials on Friday warned of dire consequences should the bill establishing the Maharlika Investment Fund becomes a law.

Speaking at a 1Sambayan online forum Friday, Carpio said Filipinos stand to lose if the proposed legislation pushes through.

He said the national government is currently operating on deficit spending and has been borrowing to finance the deficit for several decades.

The funds that will be invested, he said, are essentially borrowed funds with an annual interest of 6.9 percent.

Add to this the 2-percent limit the Maharlika Investment Fund Corp. is allowed to spend out of its funds for administrative and operating expenses.

In contrast, the Maharlika Fund is estimated to generate a 7 percent to 8 percent annual return for the investments, according to Carpio, citing one of the co-authors of the bill.

“The Maharlika Investment Fund will be a losing proposition since its expected annual return is only 7 to 8 percent while the interest on its debt-funded equity plus its operating expenses will be 8.9 percent,” he said.

“The annual cost of putting up and operating the fund will exceed the expected returns of the fund…Tayo malulugi (we will take the loss). The public will pay in terms of taxes,” he added.

The Maharlika Fund, he added, is being put up at the worst possible time, when the country’s debt servicing for 2023 is projected at P1.6 trillion or 29.8 percent of the Philippine debt.

Meanwhile, the projected deficit for 2023 is pegged at P1.47 trillion, which he said, will be funded from additional borrowings.

“It will be more prudent if we first reduce our debt-to-GDP ratio from the present 64 percent to the pre-pandemic level of 40 percent before we even think of putting up the MIF,” he said.

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