It’s not surprising why the proposal to put up a sovereign wealth fund called Maharlika with a seed money of ₱275 billion is facing stiff resistance from many sectors for a variety of reasons.
Foremost among them is the perceived susceptibility of such fund to mismanagement or, worse, to corruption. And such perception can be all too real, gauging by the many instances of massive corruption prevalent in the country.
Indeed, despite all the laws and severe penalties against corrupt public officials and their cohorts in the private sector, endemic corruption has continued to defy solution all these years, costing an average of ₱700 billion in public funds annually, as estimated by the United Nations Development Programme.
And not only is rampant corruption defying solution; it has been worsening. Data from the Corruption Perceptions Index (CPI) of Transparency International, a global movement aiming “to stop corruption and promote transparency, accountability and integrity at all levels and across all sectors of society,” revealed that the Philippines is ranked among the most corrupt in the world. The CPI showed that in a survey of 180 countries in 2020, for instance, the Philippines was ranked at number 115, two notches below the 2019 ranking of 113, several notches below its previous ranking – 14 slots down from that in 2018, 18 slots down from its 2015 ranking, and its lowest since 2012.
And more than any other pressing problems hindering our country’s economic recovery from the pandemic, corruption has been tagged as the biggest hindrance by top business leaders.
In the 2022 CEO survey last July to August conducted by the Management Association of the Philippines and the PricewaterhouseCoopers Philippines among 119 business executives, 67 percent ranked corruption as the top obstacle to economic recovery, followed by reduced foreign and domestic investments (38 percent), political uncertainty (30 percent), uncontrolled inflation (29 percent), and rising oil prices (28 percent).
Thus, amid all the fears of corruption lurking all around, it’s not surprising why so many people are against the Maharlika Fund proposal, especially with the idea that seed money would be coming from pension funds of the Government Service Insurance System and the Social Security System.
While the Maharlika Fund could be well-intentioned, to “maximize the profit potential of the state’s investible funds,” the timing for its launch doesn’t appear encouraging, especially with the risky global investment climate at present.
The state of worldwide inflation has prompted the International Monetary Fund to warn that “the worst is yet to come” and the World Bank has also made a bleak projection for the near future. “The war in Ukraine has altered global patterns of trade, production, and consumption of commodities in ways that will keep prices at historically high levels through the end of 2024 exacerbating food insecurity and inflation,” the WB said in its latest report.
But despite all the resistance, the Maharlika Fund could turn out to be a viable measure to “achieve development goals for future generations” if the risk of corruption is effectively addressed.
A thorough scrutiny of the legislative measure is vital. And with some of the most brilliant economists like Reps. Joey Salceda and Stella Luz Quimbo pushing for Maharlika, finding answers to all the questions and doubts could be much easier.
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