Senator Chiz Escudero said he is open to the creation of the Maharlika Investment Fund (MIF) but reiterated that the proposed legislation in its current form needs further amendments to address the “many gaps and loopholes”.
“Hindi ako tutol sa pagtatayo ng isang sovereign fund pero panawagan ko sa gobyerno at sa administrasyon, pag-aralan naman sana muna ito nang husto. Mga dalawang buwan na itong dumaraan sa proseso pero napakarami pa ring butas, napakarami pa ring tanong, napakarami pang mga kailangan ipaliwanang bago ito lubusang maipasa,” Escudero told reporters.
The veteran legislator earlier attended the hearing on Senate Bill 1670, which proposes the establishment of the MIF meant to boost government resources, conducted by the Committee on Banks, Financial Institutions and Currencies chaired by Senator Mark Villar, who is also the author of the said bill.
“Hindi simpleng pagkumpara ito sa ibang sovereign funds na sasabihin nilang may 50 o 80 bansang may sovereign fund. Lahat ng sovereign fund may kanya-kanyang idiosyncrasy o pagkakaiba na dapat pumili rin tayo ng bagay, angkop at sapat sa pangangailangan natin,” the seasoned lawmaker stressed.
“Tingnan natin ang sariling pangangailangan at iyon ang pagtuunan natin ng pansin.”
“Kung ituturo nila ang Temasek ng Singapore, pwede ko rin namang ituro ang One Development Fund Malaysia na nagkaroon ng maraming problema so huwag na tayong magkumparahan. Tingnan natin ang sariling pangangailangan at iyon ang pagtuunan natin ng pansin. Sa lumabas na unang pagdinig kanina, marami pa palang kulang ang pinapanukala nilang batas,” the Bicolano senator added.
Given this, he said the administration should not rush the Senate into passing its own version of the MIF bill.
House Bill 6608, authored by Speaker Martin Romualdez, was approved in the House of Representatives on December 15 last year after President Ferdinand Marcos Jr. certified the proposal as urgent.
“Possible naman talaga na kulang pa ang pag-aaral dahil unang beses pa lang nating ginagawa ito. Subalit maging ganun pa man, huwag nila kaming madaliin dahil hindi naman pala sila handa at wala sila sa lugar na madaliin ang Senado na ipasa ito sa lalong madaling panahon,” Escudero stressed.
At the Senate hearing, he questioned several provisions in the bill, saying that unless they are addressed immediately by the administration’s economic team, its passage is bound to get delayed.
He said both versions of the House and the Senate that are endorsed by the Department of Finance, the National Economic and Development Authority and the Department of Budget and Management elicit more questions than answers.
“The bill will be delayed because there are so many gaps and loopholes in it.”
“I am telling you already, the bill will be delayed because there are so many gaps and loopholes in it,” Escudero told the representatives of the concerned government agencies at the hearing.
“Inoobliga nila ang Land Bank at DBP (Development Bank of the Philippines) na maglagay ng P50 billion at P25 billion pero wala ni isang probisyon sa batas na nagsasabi na kung ano ba ang mapapala ng mga bangkong ito. Pinag-uusapan agad nila ay net earnings ng gobyerno na ibibigay sa social welfare projects na i-invest sa iba’t ibang proyekto ng pamahalaan, pero wala sinasabi ni ha, ni ho kung magkano ba ang mapupunta sa DBP at Land Bank sa perang nilagak nila roon,” he said.
According to Escudero, even the position papers submitted by these government financial institutions to the Senate panel expressed concern on the bill’s silence on their supposed return of investment or ROI.
“Wala akong nakita sa bill na may parte ang Land Bank at DBP or PAGCOR (Philippine Amusement and Gaming Corporation),” he pointed out during the hearing. “So, essentially, para mong pinuwersa ang dalawang bangko and even ang PAGCOR to give money. Wala akong nakita sa bill na may share sila on their investments so we are like hard balling (these banks) to give money to this fund without saying anything in the bill with respect to the ROI.”
Escudero also questioned the provision in the bill that gives the proposed Maharlika Investment Corporation (MIC), which will manage the wealth fund, vast exemptions from Republic Act 9184 or the Government Procurement Reform Act.
Under Section 32 of SB 1670, the procurement or engagement of the professional or technical services needed in the selection of investments authorized under the MIF Act such as fund management, investment and analysis and advisory underwriting, securities brokerage and dealership, capital market and equity research analysis, and other similar services necessary in the selection of allowable investments shall be exempted from RA 9184 and its implementing rules and regulations. Further, the competitive selection process and guidelines for the foregoing procurement or engagement of the professional and technical services shall be approved by the MIC board.
At the same time, he said he is worried over a slew of tax exemptions for investors who would put their money in the sovereign wealth fund compared to those who avail of other mutual funds.
“Why wreak havoc on the system by exempting this entity? And I think this is the first time, to my knowledge, na may isang entity na ganito kalawak ang exemption na binibigay natin,” Escudero pointed out.
He also expressed concern over the composition of the MIC board of directors whose nominations will approved by an advisory board that will be created under the proposed MIC Act, instead of having them go through the Governance Commission for Government-Owned and Controlled Corporations.
