Senator Risa Hontiveros on Tuesday echoed the sentiments if other lawmakers who expressed concerns over a proposal creating a sovereign wealth fund, saying it is counterproductive to the nation’s economic goals.
Hontiveros said she believes the proposed “Maharlika” wealth fund is better used to respond to the country’s urgent needs such as education, healthcare, and agriculture.
“An SWF is meant to come from excess funds we just don’t have, as seen by our trillions-worth of debt. We don’t need an SWF and we clearly can’t afford it anyway,” Hontiveros said.
“Kakain lang itong SWF sa budget na kailangan natin para tugunan ang mga krisis. Dapat unahin ang mga urgent priorities natin (This SWF will only eat into the budget we need to address the crises. Our urgent priorities must come first),” she said.
Just like the misplaced confidential funds, the Senate deputy minority leader said an SWF is “an unnecessary and unjustified move.”
“Lalo lang aakyat ang presyo ng bilihin kung itutulak natin ito. Hirap na hirap na yung mga kababayan natin bumili ng pagkain at gamot sa ngayon (The price of the product will only go up if we push it. It is very difficult for our countrymen to buy food and medicine right now),” she said.
“Instead of helping Filipinos afford everyday needs, we will be making it even harder for everyone,” she added.
The senator further warned this type of investment fund will falter in an oil-dependent nation like the Philippines, unlike its oil-rich neighbor Indonesia.
“Indonesia has those super profits from their coal and oil exports. We, on the other hand, have super trade deficits. So, considering today’s economic uncertainty, setting up the Maharlika Fund has neither rhyme nor rythmn. How can we set something aside for the rainy days, when our national budget itself is deficit-funded?,” Hontiveros said.
“And even with Indonesia’s oil commodity boom, 90 percent of their SWF capitalization will be sourced from foreign institutional investors. We are not at this level at all,” she stressed.
She further cited Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla’s warning that the Philippines would need more dollar reserves for the foreseeable future and not less, considering that the country’s trade deficit is now at seven (7) percent.
“These are the most difficult times for central bankers, like Gov. Medalla,” she noted.
” Gumegewang ang piso. Malinaw na walang sobrang dollar reserves na pwedeng i-subi para sa gustong Maharlika Fund (The value of peso is swaying. It is clear that there are no excess dollar reserves that can be subbed for the desired Maharlika Fund),” she said.
“I do hope we get to keep him on board, even after he has publicly disagreed with the DOF (Department of Finance) Secretary,” she stressed, pointing to Finance chief Benjamin Diokno.
Hontiveros also questioned Diokno’s claims that high demand for minerals could prop up the SWF when the government has yet to see a boom in copper, nickel and other minerals that are presently in demand.
She urged Diokno to instead spend more time developing bankable and investment grade projects with the private sector, such as in housing, transport and renewable energy, that will attract idle domestic and foreign funds.
“We should focus on attracting different countries to invest in our projects. This is the better option to gambling the hard-earned pension of Filipinos in high-risk investments,” she said.
“I will be sure to bring these points up on the Senate floor at the proper time. For now, this so-called Maharlika fund is setting off many alarm bells. Long-term consequences will be felt if we establish a sovereign wealth fund prematurely,” Hontiveros she stressed.