People truly wonder what the president’s finance secretary is up to when it predicted a robust 6.5 percent economic growth for 2023.
Secretary Ben Diokno made his optimistic assessment of the nation’s economy barring unforeseen forces that could hamper growth.
Otherwise, he said, the country could easily jump a 7.5 percent growth rate taking into account the bustling manufacturing sector, the low record of unemployment, the stable and resilient banking system which are indicative of the country’s ability to buffer external headwinds, all indicating a resilient economy.
The desire of the President to make use of the country’s sovereign wealth fund, as usual, opened the door to new opportunities, all hoping to bring capital and wealth by squeezing additional interest rate to an already tight market economy, this time risking the nations’ hard-earned savings called Maharlika or sovereign wealth fund.
In both instances, despite the fanfare of BBM’s last visit to Beijing dubbed as “both historic and a reaffirmation of the friendship between the two countries,” many political observers rather see things quite differently.
Some interpret his visit to Davos as sort of a cover to delude the Asian public from being identified as pro-US.
Some say Marcos junior wants to be identified with EU to dispel the suspicion that US has made a beachhead after BBM won against Duterte.
BBM’s appearance was most important and relevant, and, like his father, he made sure his presence would have an impact on the audience.
Marcos wanted to make sure his speech will not end up as run in the mill but will stand out to be remembered by history.
At the Davos meeting of the World Economic Forum, Marcos calculated he would stand out as the most productive guest.
Many analyze his presence as one Asian leader identified as much closer to the European Union.
Second, to make his presence dramatic, his administration offered incentive to compensate their presence in that super-select annual elitist gathering.
For all his flamboyance that the Philippines would pursue a neutral course in the conduct of its foreign policy, many remain uneasy since the US already made a pronouncement of its intention to secure five more military bases in addition to the six miliary bases granted to it under EDCA.
According to the statement by Lt. Gen. James Bierman, Commanding General of the Third Marine Expeditionary Force, he said the five miliary bases is in addition to the existing six bases under EDCA.
This is an attempt to pre-empt Constitutional provision much that the pronouncement already precludes us from rejecting such agreement although it is the Constitution that will have a final say whether to allow an expansion of those US military bases in the country.
A closer identification of the Philippines with EU could lessen an attempt by the country and the US to artificially preclude Europe as spearheading the crusade to isolate China and to preposition themselves to any future invasion of Taiwan.
That way, the Philippines will not appear, if not substitute the US, as the leading anti-Chinese villain in the region.
On its existing relations with China, its patience is somewhat being tested.
There seems to be an inexhaustible patience by China on how we treat that country.
For instance, the delay in our ratification of the Regional Comprehensive Economic Program or RCEP.
Of course, China is watching every move we take.
It will always be a win-win situation for them.
As our agricultural export continues to suffer, we always find excuses to blame others for us like our inability to lower our export products.
We always blame why we have an inefficient irrigation system and woefully do not have a modern fertilizer plant to sustain our agricultural production to a competitive level.
Another is the cancellation of joint oil exploration agreement between China and the Philippines.
The country could not proceed to implement the project considering the area is within the disputed waters.
In the meantime, other countries have proceeded to carry out their joint exploration with China while the Philippine project remains in the drawing board, to our detriment.
The same can be said of the modernization of the Philippine railway.
It seems that Japan wanted to have a slice of the 36-kilometer subway construction project.
Many are wondering what the 36 kms will be traveling only for about 22 minutes.
The project is expected to cost ₱355.6 billion (equivalent to US$7.06 billion in 2017 dollars).
Much of it is covered by loan provided by Japan.
This explains why up to now, the company that will operate the subway has not given an estimated cost per kilometer to be charged to the commuters.
Remember, it is predicted that commuters will be going to and returning from work at least five days a week.
The World Economic Forum was the most tempting venue for BBM to express his plans in the coming five years in office.
BBM chose the occasion for the moneyed class to announce his awaited economic blueprint, hoping it would help alleviate the country from a state of lethargic development.
With such high-profile capitalization for gargantuan projects with some saying could surpass the cost undertaken by his farther, surely is now in the eyes of leading investors.
Many would flock and hear what he was going to say.
It’s not his novel idea they wanted to hear but the opportunity to be invited and participate in the new venture. Finance Secretary Ben Diokno already gave his eye-opener on what’s to come.
Every prospective investor always looks forward to an increased dividend in their investment, and every investor would always seek to increase their participation which is necessary to finance gargantuan projects.
One, it is an easy route to obtain this huge amount using the contribution of members from either the SSS, GSIS, or Pag-Ibig Mutual Development Funds.
All these, like the Makarlika Wealth Fund, is by nature a form of trust fund.
This means that these funds are contributed by the workers from the private sector, from the government employees, and other contribution to such private insurance like the PagIbig Home Development Mutual Fund and private insurance entity where members contribute some kind of monthly amortization as savings.
This is a trust fund; hence, whatever the anomalies or corruption that may take place in the disposition of these funds will have to be paid directly from the coffers of the state.
The Maharlika Wealth Fund, under the original plan, wants to make use of the contributions from the SSS and GSIS which accordingly has collected an amount of P275 billion.
Other sources are being tapped to augment the capital like seeking contribution of P50 billion from the Land Bank of the Philippines and P25 billion from the Development Bank of the Philippines.
What Secretary Diokno did not mention is the participation of the private sector from the international banks and organizations to augment the capital contributions and equally to impose their own interest rate that often fluctuate with the country’s interest rate which contribute to the devaluation of our currency.
The Philippines possibly faces difficulties in resolving many of its major economic problems.
But because we managed to maintain a fairly large and stable currency reserves, the Banko Sentral ng Pilipinas opted it wise to gamble our foreign currency reserves accumulated through contribution by our overseas workers done through the system of remittances.
Many of our officials from the BSP are being tempted to poke their nose into using this fund to capitalize the projects of the administration using a new term as “sovereign wealth fund.”
It is easy to throw the wealth fund and allow it to participate in a “casino economy” with those responsible having no remorse of losing those funds.
Of course, the temptation is to raise capital for the ambitious projects of the President which otherwise will have difficulty in securing funds and to increase interest rate to foreign investors, reason why international investors and behemoth bankers flocked to Davos to hear what they can pick up from what the President was going to say which for them meant extra income.
Thus, the WEF is seen as an opportunity for the international bankers and investors to earn additional income done through the legal channel of assured income earning higher interest rate.
As they see it, the funds that will be oozing from the project is guaranteed by the state, it being in the character of sovereign wealth fund.
This also explains why some sectors vehemently oppose the idea of using the “trust funds” as seed capital for the proposed projects.
The mode today in using state funds dubbed as sovereign wealth fund is to borrow directly from the public to finance the government of its ambitious projects.
The use of sovereign wealth funds is to directly use public savings without their consent and is now used by the opposition to lambast the government of BBM.
It is incongruent to us to publicly offer our sovereign wealth fund while the country suffers from a deep-seated problem of $7.5 billion trade deficit.