MANILA, Philippines – Former senator Paolo Benigno “Bam” Aquino on Monday, December 5, questioned the timing of a proposed sovereign wealth fund (SWF), even as administration allies rush its passage in the House of Representatives.
Aquino, who was a senator from 2013 to 2016, issued the statement on the same day the House committee on banks and financial intermediaries deliberated the proposal for the third time, a week after it was first filed as a bill by House leaders who are also relatives of President Ferdinand Marcos Jr.
Aquino, whose last public political role was as campaign manager to former vice president Leni Robredo’s 2022 presidential run, found his name dragged into political talk this week as allies of President Ferdinand Marcos Jr defended the proposed fund.
No less than the President’s eldest son, Senior Deputy Majority Floor Leader Ferdinand Alexander “Sandro” Marcos, defended in a chance interview on Monday the proposed fund by saying it was “nothing new.” Sandro mentioned Aquino’s 2016 bill filed during the previous Duterte administration in making his case.
The proposed law creating the SWF was sponsored by admin allies that included Sandro and House Speaker Martin Romualdez, whoi is the President’s cousin.
Former president Deputy House Speaker Gloria Macapagal Arroyo defended the proposed bill in like manner, saying in a statement that similar funds exists abroad and that the fund had been proposed in the Philippines before – in 2016, by Aquino.
In his statement, Aquino acknowledged and agreed with Sandro and Arroyo but questioned the SWF’s timing. “Pangkaraniwan ang pagkakaroon ng SWF sa buong mundo, at isa itong long-term na paraan upang palawigin ang yaman ng isang bansa. Pero ang tanong, tama ba ang timing?” he said.
(Having a SWF is not unusual globally and it’s a long-term way to expand a country’s wealth. But the question is: is the timing right?)
The proposed Maharlika Wealth Fund, sponsored by admin allies would gather P275 billion from government pension funds and banks for investing in big-ticket national development projects and other assets.
Legislators, economists, and civil society leaders, and groups have criticized the proposed fund for potentially exposing pensioners to higher risk and for the lack of safeguards in its management. Among the critics is Senator Imee Marcos, the President’s eldest sister.
Don’t touch pensions
There are at least two major differences between his 2016 proposal and the 2022 proposal, which has since been christened the Maharlika Wealth Fund.
First, said Aquino, his proposal was made in 2016 – when the Philippine economy was doing well, growth was up, debt was low, and inflation was low.
“Ngayon, bumagal ang ekonomiya dahil sa pandemya, at mataas ang presyo ng bilihin. Marami sa mga kababayan natin ang nangangailangan ng tulong sa pang-araw-araw na gastusin ng kanilang pamilya. Palagay ko, mas kailangang mabigyang prayoridad ito dahil ito talaga ang hinahanap at kailangan ng ating mga kababayan,” he said.
(The economy has slowed down because of the pandemic and prices are high. Many of our countrymen need help just for their daily expenses. I think it’s best to prioritize this because this is what Filipinos want and need.)
Aquino also cited another major difference: his proposal would have sourced funds from budget surplus, and not from pension funds. “Ang ginagamit na pondo para sa isang sovereign wealth fund ay karaniwang surplus o sobra ng budget dahil may posibilidad na malugi ang isang sovereign wealth fund. Klaro na hindi dapat galing sa mga pensyon ng mga manggagawa ang mga pinagkukuhanan nito,” he added.
(The fund that are usually used for a sovereign wealth fund are surplus funds or excesses from the budget because there is a chance that a sovereign wealth fund would loss money. It’s clear that workers pensions should not be the source of funding.)
Several existing sovereign wealth funds, according to the International Forum of Sovereign Wealth Funds, source their money from budget surpluses, excess income from the state’s natural resources (mostly oil, in the case of oil-rich countries), or surplus in payments, foreign currency operations, and privatization efforts.
Aquino ended his a statement with a challenge to the Senate, where he once belonged.
“May pagkakataon ang Senado na baguhin ang mga problemadong probisyon, ayusin ang timing ng batas, maglagay ng safeguard sa korapsyon at siguraduhing pabor ang batas sa nakararaming Pilipino,” he said.
(The Senate has an opportunity to change problematic provisions, fix the timing, introduce safeguards against corruption, and make sure that the law is beneficial to the majority of Filipinos.)
Defenders of the proposal, which President Marcos supposedly backs, have claimed doubled standard in the criticism against a sovereign wealth fund under a Marcos administration. But the Marcos name itself is tied to tales of corruption and fiscal mismanagement – tales proven in court or documented by former allies and journalists.
The current President’s father is his namesake, the late dictator Ferdinand E. Marcos. During the first Marcos presidency, the Philippines saw the economy slow down as millions in public money was stowed away by the Marcos family and their cronies. In 2003, the Supreme Court said the $658 million the Marcoses kept in a Swiss foundation were stolen funds. The High Court also ruled that the Marcos family was unable to prove that they had the means to amass such wealth.
After the ouster of the first President Marcos’ ouster, the Presidential Commission on Good Government was organized to get back the fund stolen from government coffers by Marcos and, his family, their relatives, and their allies.
Even the name Maharlika evokes dark memories of the deposed dictator. His dubious guerrilla unit was named Maharlika. But archival documents from the US Army, and the National Historical Commission of the Philippines questioned the existence of this guerrilla unit and the claim of the ousted strongman that he was a guerrilla leader during World War II. – Rappler.com