Pimentel to Marcos: Time to

abandon the Maharlika project

Job Manahan, ABS-CBN News
Oct 18 2023 09:52 PM

President Ferdinand R. Marcos Jr. signs Republic Act 11954 or the

Maharlika Investment Fund Act in a ceremony at the Kalayaan Hall of
Malacañan Palace in Manila on July 18, 2023. Rolando Mailo, NIB-PNA

MANILA — Senator Aquilino "Koko" Pimentel on Wednesday urged President

Ferdinand Marcos, Jr. to abandon and scrap the Maharlika Investment Fund,
saying the government does not have any money to spare to fund it.

Marcos has ordered the suspension of the sovereign investment fund's

implementation pending "further study," based on a document released by
Malacañang. But speaking on Teleradyo Serbisyo, Pimentel said the the country
has no underlying asset and surplus funds for Maharlika.

The senator was referring to state lenders Development Bank of the Philippines
(DBP) and the Land Bank of the Philippines (LBP), among the sources of
Maharlika's seed funding.

 Maharlika Investment Fund implementation suspended 'for further

study': Palace

Both banks earlier sought regulatory relief for flexibility to comply with the
capitalization requirement set by the Bangko Sentral ng Pilipinas (BSP). The
central bank said Landbank and DBP have requested regulatory relief despite
still being compliant.

"Hindi talaga pinag-isipan nang mabuti ito... Walang panggagalingan ng pera,

maghanap ng existing money na dapat hindi ginagalaw kasi mayroon nang
purpose ang mga pera na yun," Pimentel said.

"Siguro harapin na lang ng executive department ang katotohanan... I-repeal na

lang namin ang batas na 'yan para tapos na yan, yang malungkot at masamang
chapter sa kasaysayan ng Republika ng Pilipinas," Pimentel added. Pimentel
said the ongoing issues on its constitutionality, possible lack of applicants to run
the Maharlika Investment Corporation, and the "worsening" economic situation
globally might be among the factors for its suspension.

 EXPLAINER: The Maharlika Investment Fund, as approved by Congress

"Nakita nila mapapahiya tayo dito, pag-launch natin dito, walang participants,
walang sinasabing foreign investor na ipapasok natin through Maharlika," he
said.

The best thing to do, he said, was for Marcos, Jr to just abandon the Maharlika
Investment Fund and repeal it.

"Yung pride natin ay lunukin na natin tapos huwag na us manindigan sa mali...

i-repeal na yang batas na yan. Let us abandon the Maharlika project," he
said. "Siguro harapin na lang ng executive department ang katotohanan. Medyo
nagbago pa rin ang world situation, aminin na lang natin na it is really a wrong
idea or bad idea. I-repeal na lang namin ang batas na 'yan para tapos na yan,
yang malungkot at masamang chapter sa kasaysayan ng Republika ng
Pilipinas," he said.

"I hope that this suspension is just the first step towards abandoning the project
itself."

MARCOS YET TO FIND PERSON TO RUN MAHARLIKA

Meanwhile, House Ways and Means Committee Chair Joey Salceda said
Marcos, Jr is just being careful so the fund would not fail. This includes,
Salceda said, the shortlist of the advisory board and the composition of those
who would run Maharlika. The lawmaker said Marcos Jr. has yet to find the
individual that would lead the investment fund.

"The key issue with the IRR of the Maharlika Investment Fund... is that it
appears to have limited the options of the President only to those who have
submitted applications. Yun lang talaga," Salceda said, chair of the technical
working group that crafted the bill creating the fund at the House of
Representatives.

 Marcos cuts Land Bank's 2022 remittance to gov't to zero

"Hindi nakita ng presidente yung pangalan na gusto niyang makita doon," he

said. "The situation is the President is responsible and accountable for the fund
and since the CEO is his principal alter ego, imagine the harm. He would like to
see the name that he wants to choose. That person is not in the list," he
said. Salceda blasted Pimentel for his comments over Maharlika, saying the law
underwent the "crucible of public opinion."

He adds that there was also expert advice from stakeholders on handling the
sovereign investment fund."I was given proper advice on how a sovereign
wealth fund or how the investment development fund is being managed,"
Salceda said.

MAHARLIKA SUSPENSION A 'RELIEF' - ANALYST

The suspension on the implementation of the Maharlika Investment Fund is a

“relief” for a market analyst, citing “very uncertain global climate."

Jonathan Ravelas, managing director at eManagement for Business and

Marketing Services, said it is best to wait until inflation and interest rates are on
a downward trend globally.

 Gov't urged to return Maharlika money from Landbank, DBP

"You have a very uncertain climate. You already have the Russia-Ukraine war,
and then Israel and Hamas. You have the high prices and high interest rates. It’s
a challenge to really start a fund at this time,” he told ABS-CBN News on the
sidelines of Philippine Marketing Association’s General Membership Meeting.

"We’re already seeing the Philippine stock market near the 6000 levels, so
we’re already seeing the knife falling. If we are to see the same thing for the
global economies, how do you catch a falling knife? I think the prudent way is
allow the knife to fall,” Ravelas added.“Let’s wait until the global concerns of
rising inflation and rising interest rates. Hopefully, probably until the first half.
Let’s take this opportunity to reorganize, organizing the people and study the
landscape," he said.

"The key word there is we have a comfortable trend that inflation is really
coming down. If you still have war prospects that are there, it’s very difficult to
probably see commodity prices eventually going back to pre-pandemic levels or
at least 2020 levels,” he said.

Ravelas said the government should also reconsider sourcing the initial funding
for the Maharlika Investment Fund from LBP. "The challenge of Land Bank is
that it will limit their ability to lend to the countryside, and we need to improve
our agriculture. They are the ones providing the lifeline to countryside
development. Let them do their job, look for another source. They can tap other
government savings that they can find… They might want to look into the
government’s investment arm,” he said.
Last month, Land Bank said it remitted P50 billion contribution to the
Maharlika Investment Fund. The DBP, meanwhile, infused P25 billion to the
MIF.