PAGBABAGO

At last, the proponents of the controversial House Bill 6398 heeded the voice of the people, most of them pensioners from the Government Service Insurance System (GSIS) and the Social Security System (SSS). They are wage earners and ordinary employees who feared that their hard-earned savings were being taken away from them to be invested in real and financial assets, which to them meant potential risks.

The earlier proposal was that the Maharlika venture will have an initial fund of ₱275 billion which will come from GSIS with ₱125 billion, SSS (₱50 billion), Land Bank (₱50 billion), Development Bank (₱25 billion), and the national government (₱25 billion). The amended bill would leave the GSIS, SSS and the national government out as contributors, and instead would use as its seed money, profits of Bangko Sentral and funding from the two government banks, DBP and Land Bank.

Generating revenue for a cash-strapped country is a good idea, but an initiative with such an enormous outlay, larger than any investment the country had made in the past years, is bound to elicit skeptical comments and suspicions. Especially from pensioners who rightly expressed that the funds are theirs, not government’s. In fact, the mere idea that the government could be playing with fire with regard to their lifetime savings, could be frightening!

Thus, over the past week, from traditional and social media and other forums, citizens, shaken by reports that the proposal contained ambiguities, trooped to Congress to show their opposition to the bill, and added their names to a change.org petition which had elicited some 48,000 signatories.

As with most investments like this one, there are positive attributes that could make them attractive to venture some investors who have lived with risks and uncertainties. It just happened that in this case, a considerable number of the fund would come from pensions of ordinary employees. To further understand the reason for this public indignation, one has to recall dozens of cases of malversation of public funds in the past years – the coco levy fund that had deprived millions of poor coconut farmers, the recent Pharmally scandal on purchase of Covid-19 paraphernalia, and the billions amassed by cronies during the decade of dictatorship, among many others. Corruption had become endemic, and consequently engendered deep distrust of government.

What we are saying is that an idea might be a good one, but that unfortunately, its birth was not at the right time. Like what we had said about the right “constitutional moment” in revising our Charter, today may not be the “right moment.”

Too, with global recession, rising inflation, rising interest rates, and with climate change as a priority challenge, the Maharlika sovereign wealth fund may encounter difficulty in attracting investors. The experience of Norway which is reported to have made one of the largest investments in sovereign wealth fund, is an example. It lost $174 billion because of a plunge in value of its technology and is only recovering its loss today.

Singapore has been a success story, and we know why it did. It has the desired infrastructure including leadership that rated highly in integrity. But Malaysia’s prime minister, Najib Razak, was imprisoned for having amassed Malaysia’s wealth fund, is another tragic story.

GSIS president Arnulfo Veloso in a television interview, showed support for the venture saying that the issues being challenged have been carefully considered and addressed, and that safeguards are in place. Among the proponents is Marikina Rep. Stella Quimbo, vice chairman of the House Committee on Appropriations is competent and a person of integrity. I am confident that the project will have directors who are “independent” in the true sense of the word. Perhaps, some other time when we shall have restored people’s trust in government, our people may be able to openly welcome worthy ventures such as this.

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