Metro Manila (CNN Philippines, January 16) — Despite having only two senators in the opposition, Senate Minority leader Koko Pimentel on Monday said he believes the whole upper chamber will not let the controversial Maharlika Investment Fund (MIF) just easily pass and be a law.
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“We will really scrutinize this and I think although we only have a 2-person minority, I believe that the 22-person majority will also scrutinize this measure,” he told CNN Philippines’ The Source.
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Speaking to reporters on Sunday, President Ferdinand Marcos Jr. said he will explain to business leaders who are attending the World Economic Forum (WEF) in Davos, Switzerland that his administration aims to establish the Maharlika fund for investments in agriculture, energy, digitalization, and climate change, among others.
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The forum is a great venue for a “soft launch” of the MIF given its prominence and its participants, Foreign Affairs Undersecretary Carlos Sorreta earlier said.
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However, Pimentel disagrees. The opposition senator earlier said a soft launch of the bill is premature.
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He also said this move may only pressure the senators to pass the controversial bill, which was swiftly approved by the House of Representatives.
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“If the president announces this therefore it is premature and the more dangerous effect is this will be an indirect way of pressuring the Senate to blindly approve this measure which we should not,” Pimentel explained.
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The senator said that the current version of the bill “is not well thought of, it is not well written, and it has internal inconsistencies or contradictions.”
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One of the issues he raised is on funding.
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House Bill 6608 states that the initial capitalization of the fund will be from the Landbank of the Philippines (Landbank) worth ₱50 billion, and the Development Bank of the Philippines (DBP) worth ₱25 billion.
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It also noted that subsequent annual contributions, specifically in the first and second year of implementation, the Bangko Setral ng Pilipinas (BSP) shall remit 100% of its declared dividends, the bill said. In the succeeding years, the BSP shall remit 50% of its declared dividends to the MIF, and other half to the national government to fund the increase in the capitalization of the BSP.
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Pimentel said these funds already have their purpose since these help banks “run in prudent manner” to maintain the ratios required by the BSP.
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“If we move this from the balance sheets of DBP and Landbank of the Philippines then they will be, they might be already falling below the ratios or the reserve requirements required by the Bangko Sentral,” he pointed out.
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Moreover, requiring the BSP to remit dividends will deprive the national government of some cash flow, he said.
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“What will replace the cash flow from a dividend of a governmental body like the BSP, either higher taxes or more borrowings so balik din po tayo (we just go back),” Pimentel said. “The Maharlika Corporation actually will be another reason to incur more borrowings.”
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The House approved the proposed Maharlika Investment Fund on Dec. 15, barely two weeks after it was filed on Nov. 28 by House Speaker Martin Romualdez, presidential son and Ilocos Norte Rep. Sandro Marcos, and four other lawmakers.
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