By Artchil B. Fernandez
Inflation last month is at 8 percent, the highest in 14 years. The country’s debt increased from 13.51 trillion pesos to 13.64 trillion pesos. The country is on the edge of an economic precipice but lo and behold, the top priority of BBM is establishing a sovereign wealth fund.
The whole country at present is on uproar when the Marcos family pushed in Congress for the creation of Maharlika Wealth Fund (MWF) proposed by House Bill (HB) No. 6398. HB 6398 is authored by BBM’s cousin, House Speaker Martin Romualdez, Martin’s wife Tingog Party List Representative Yedda Romualdez, and BBM’s son Senior Deputy Majority Leader Sandro Marcos.
Initial start-up capital for the wealth fund is 275 billion pesos and will come from government financial institutions (GFIs) broken down as follows: Government Service Insurance System (GSIS) – P125 billion; Social Security System (SSS) – P50 billion; Land Bank of the Philippines (Land Bank) – P50 billion; Development Bank of the Philippines (DBP) – P25 billion; and National budget – P25 billion. Other fund sources of the MWF are Bangko Sentral ng Pilipinas (BSP) – 50 percent of annual dividends, Philippine Amusement and Gaming Corporation (PAGCOR) – at least 10 percent of gross gaming revenue streams, and national government – yearly contributions as determined in the annual national budget.
HB 6398’s approval is being rushed in Congress, probably before the Christmas break. “Utos ng pangulo” (an order of the President), Albay Representative Joey Salceda admitted when asked why Congress is in a hurry to approve the bill. Under HB 6398, the sovereign wealth fund will be handled by a 15-member board of directors to be headed by the president of the country as chair, currently BBM.
Establishing a sovereign wealth fund is a practice of countries with an abundant excess of money. Norway created a sovereign wealth fund sourced from its oil and gas revenues, the Norwegian Government Pension Fund, the largest of its kind in the world valued at $1.36 trillion. The financial yield comes from the fund’s investments in thousands of companies around the world.
Neighbor Singapore has two sovereign wealth funds, the Government of Singapore Investment Corp. or GIC and Temasek Holdings. Both have combined assets of $1.3 trillion.
While the Norway and Singapore cases are a success, they are not immune from the vagaries and volatility of financial markets. This year, Norway’s sovereign wealth fund lost a staggering $174 billion while Temasek had to write off $275 million when its investment in FTX, the world’s third-largest cryptocurrency exchange flopped.
Malaysia’s 1MDB sovereign wealth fund is a poster boy of the scheme’s dark side. 1MDB was established by former Malaysian Prime Minister Najib Razak in 2009. The fund became Najib’s milking cow and $4 billion was stolen from 1MDB by him and his cronies. The “1MDB scandal” led to the political downfall of Najib in 2018. He is now in prison for abuse of power and embezzlement of public funds.
The Marcos proposed sovereign wealth fund is more likely to go the way of Malaysia’s 1MDB. HB 6398 exempts the Maharlika Wealth Fund (MWF) from the Salary Standardization Act, Government Procurement Reform Act, portions of the GOCC Governance Act, and all tax laws. These numerous exemptions are glaring red flags that expose the dark designs of the Marcoses on the money of the Filipino people. Without accountability, BBM and his family can do whatever they want to the huge money and history is likely to be repeated again. A submitted report is the only “safeguard” which is utterly ridiculous since BBM and his family is the ones who will write it.
Perhaps the strongest argument against MWF is the Marcoses. Their horrendous track record in handling public funds is well-established. In the 20 years that the Marcos dictatorship ruled the country, an estimated $10 billion was stolen from the Filipino people and only half of it was recovered so far.
And now back in power through lies and falsehoods, the unrepentant Marcos family is dipping their fingers again in the national treasury. HB 6398 is legislated scam and this is the usual modus of the Marcos family. In 1973, the dictator Marcos senior issued PD 961 creating Coconut Industry Investment Fund (CIIF) and imposed coco levy on poor and hapless Filipino coconut farmers. The fund was used by Marcos senior and his cronies to gain control of San Miguel Corporation and became a huge milking cow for them. Until now the funds are still in dispute and the poor farmers who own the money have not benefitted from it despite being collected ostensibly to help them.
Now the Marcoses in another legislated scam are aiming to plunder the retirement fund of public and private Filipino employees as well as the national budget and other GIFs. Due to strong public opposition, Congress this week backed down and said GSIS and SSS are removed as sources of funds for MWF. The retreat is due to fierce resistance of the public, but vigilance is needed since the Marcoses are determined to have their way. The wily Marcoses can sneak again the removed provisions.
What the latest legislated scam the Marcoses are cooking indicates is the notorious family has not changed. Looting the national treasury and robbing other people’s money is in their DNA. BBM is barely half a year in office and here they go again, scheming to get their dirty hands-on pensioners’ hard-earned money, the national budget and the GIFs. While some thieves go the way of Zacchaeus redeeming themselves, others like the Marcos family remain constant and steady in their wicked ways.