Deposit insurance, too

The financial predators in government failed to get their claws on our pension funds to finance the Maharlika sovereign wealth fund or whatever creature this non-performing project turns out to be.

They also failed, thanks to a belated restraining order from the Supreme Court, to complete the impounding of P89.9 billion in “unused” subsidy of the Philippine Health Insurance Corp. The PhilHealth “savings” were supposed to partly finance the new congressional pork barrel, the unprogrammed appropriations in the 2024 national budget.

In a snit, lawmakers – with President Marcos’ approval – scrapped any subsidy for PhilHealth this year.

But they managed to quietly impound “savings” from all other government-owned and controlled corporations (GOCCs), including P107.23 billion from the Philippine Deposit Insurance Corp.

PDIC funds, like premiums paid to the Social Security System and the Government Service Insurance System that Marcos 2.0 tried to tap for Maharlika, are sourced from private assets. Is the government’s impounding of about half of PDIC funds even legal? And if it is, why should it be?

Finance officials gave the same reasons for the impounding of the PDIC funds that they gave in the case of the PhilHealth funds. Basically, that what’s good for “pork”-hungry lawmakers in an election year should be good for us working stiffs from whom all sorts of taxes are automatically deducted.

The amount of deposits covered by PDIC insurance for a distressed bank is limited, at just P500,000 per account.

*      *      *

Last Monday, Ako Bicol party-list Rep. Zaldy Co was stripped of his chairmanship of the powerful committee on appropriations.

The chairmanship of the committee was declared vacant, with no one objecting, by the congressman-son of President Marcos, Ilocos Norte Rep. Sandro Marcos. Co was allowed the graceful exit of announcing his “resignation” from the post.

Over the holidays, Co was trending together with Sen. Grace Poe (“Dios Co Poe!”) for the mangling by the bicameral conference committee of the 2025 General Appropriations Act (GAA) to produce a national budget laden with pork barrel for lawmakers’ election campaigns.

A vice chairman of the panel, Manila Rep. Benny Abante, told “Storyon” on One News last Monday that he was surprised by Co’s ouster as chair of the House committee. Abante insisted that he did not know the reason for the move.

Because it came amid the muscle flexing by the Iglesia Ni Cristo in support of the motherhood objectives of peace and unity, there was some speculation that it was meant to appease supporters of Vice President Sara Duterte.

The VP was stripped of P1.3 billion in her office budget for this year (plus her Cabinet post and trusted security contingent), and she might face criminal indictments for graft and grave threats.

That budget cut, however, was approved by both chambers of Congress and signed by BBM. Also, the House committee on good government, not the appropriations panel, conducted the worse grilling on the VP’s confidential funds.

And the VP’s arch enemy is not Zaldy Co, but BBM’s favorite cousin the Speaker. So the ouster of Co from the appropriations committee is seen to be more linked to the public uproar against the national budget that was realigned by lawmakers in aid of their election.

Co was replaced in an acting capacity yesterday by one of the panel’s vice chairs, Marikina Rep. Stella Quimbo. Since she herself has yet to recover from the flak related to her perceived penchant for Hermes Birkin bags (priced from $10,000 to $35,000 each on average), Quimbo is also expected to be replaced.

*      *      *

Such changes will be largely cosmetic unless accompanied by genuine measures to address the damage caused by the budgeting hocus-pocus inflicted on the public by Congress.

The impounding of “savings” is not new. During the scandal-ridden presidency of Gloria Macapagal Arroyo, the annual GAA was often reenacted so that unused funds of government agencies could be classified as savings and impounded and used at will by Malacañang.

This time, the “savings” are being sourced from GOCCs, weakening the agencies’ capability to effectively carry out their respective mandates.

There’s a wholesale amendment – without going through the proper legislative process – of the different laws passed to create the GOCCs.

Each GOCC has a separate charter with specific missions. Yet their funds are being used, without the necessary legislative amendments to their individual charters, for different purposes. The purposes are whatever lawmakers decide to earmark under the unprogrammed appropriations, in violation of the Supreme Court prohibition against such practices post-GAA enactment.

*      *      *

It’s been two years since the usual suspects in Congress railroaded the creation of BBM’s pet legacy project, the Maharlika. The seed capital for this project, created by a country with no sovereign wealth to speak of, came from funds meant to assist farmers and promote development – P50 billion from the Land Bank of the Philippines and P25 billion from the Development Bank of the Philippines.

The Bangko Sentral ng Pilipinas is forking out P50 billion in declared dividends for the first two years of Maharlika.

Both the DBP and Landbank were given regulatory relief from capital requirements in return for their contribution to Maharlika. The DBP has announced that it would seek a similar relief this year.

Recently, the International Monetary Fund called for the restoration of the capital of DBP and Landbank and their exit from regulatory relief “as soon as possible.”

The only folks who have benefited from Maharlika so far are the fund managers with their fat salaries that are based on prevailing industry rates.

Its first intended investment is spooking certain quarters in the business community who smell a confiscatory scheme afoot.

The Maharlika seed capital comes from state-run banks. The situation is worse for the P107.23 billion impounded from the PDIC. That money came from private bank depositors. It will be added to financing for the pork barrel as well as the ayuda programs that politicians need for patronage and their election campaigns.