EDITORIAL - Suspended
The concept remains a good one, and the fund is expected to be operational by yearend. “We are just finding ways to make this as close to perfect and ideal as possible.” That’s President Marcos, explaining his suspension of the implementation of his pet project, the Maharlika Investment Fund.
Speculation swirled that it was in fact an admission that the Maharlika concept is flawed because the suspension came on the heels of the Land Bank of the Philippines and Development Bank of the Philippines seeking regulatory relief from the capital requirements set by the Bangko Sentral ng Pilipinas. BSP Governor Eli Remolona Jr. said that “in principle,” relief from compliance with the requirements could be granted to Landbank and the DBP only for a limited period.
In a memorandum dated Oct. 12, Executive Secretary Lucas Bersamin said the President had ordered the national treasurer, in coordination with Landbank and the DBP, to suspend the implementation of the rules and regulations governing the creation of the wealth fund. Bersamin said the President wanted to ensure that there were enough safeguards for transparency and accountability in the IRR.
Shouldn’t this have been done before the Maharlika Investment Fund was launched with indecent haste? Despite warnings issued by various sectors including economics professors and the former governor of the central bank, there was a mad rush in Congress and Malacañang to pass the MIF.
The most basic criticism of Maharlika was that the country had neither the financial surplus nor natural wealth to create a sovereign wealth fund. But the administration and its congressional allies, seemingly fixated on the word “Maharlika” and wanting bragging rights, passed Republic Act 11954 anyway, with officials touting the fund to investors overseas.
With the constitutionality of RA 11954 being challenged before the Supreme Court, no investor has gone beyond the supposed expression of interest in the fund. And with the war between Israel and Hamas aggravating the impact of Russia’s invasion of Ukraine, it’s a bad time for the global economy. The pause in the MIF implementation should provide the thorough scrutiny that it should have been
