Will Marcos Jr. take up Maharlika Fund at Davos?

Before returning from the European Union-ASEAN Commemorative Summit held in Brussels – the latest of his seven official trips abroad since he assumed office in July – Ferdinand Marcos Jr. on Thursday certified as urgent the “immediate enactment” of House Bill 6608 – the Maharlika Investment Fund (MIF) bill.

With alacrity, 297 members of the House of Representatives passed it on third and final reading. Six voted against, including the three Makabayan bloc members and veteran oppositionist Rep. Edcel Lagman.

Just a while earlier, the body had passed the bill by voice vote, on second reading – the House leadership having ignored some legislators’ appeal to allow House members to consult their constituents first during the Christmas break, and after rejecting certain proposed amendments but accepting some.  It took only 17 days since its filing on Nov. 28 for the House to approve the contested legislation.

Among the proposed amendments rejected were two that Makabayan bloc Rep. France Castro had pushed: (a) remove the possibility of the GSIS, SSS and other government financial institutions making investments in the MIF and (b) remove the power of the MIF to condone liabilities to it, obtain funds from public borrowings and require Congress approval for increases in annual contributions to the fund. A provision was let through preventing pension funds from being compelled to contribute funds to the MIF.

Amid the hullabaloo, former economic planning secretary Ernesto Pernia dropped a thought-provoking suggestion: Why not use the unpaid P203-billion cumulative estate tax of the Marcos family as MIF seed capital? “If he is sincere, if he will invest,” Pernia said, referring to Marcos Jr.

The approved bill will be sent to the Senate after Jan. 26, when the 19th Congress (the Senate and the House) will resume sessions.  No counterpart bill has been filed in the Senate.

Senate Minority Leader Aquilino Pimentel III vowed to scrutinize HB 6608 once it gets to the Senate, “even the commas, semicolons and periods.”

He noted that Marcos Jr.’s certification of the bill hadn’t complied with the constitutional requirement that there must be a necessity to meet a public emergency or calamity. “This,” he stressed, “is clearly an abuse already of the presidential prerogatives and powers.”

Marcos Jr.’s certification stated as basis that it aims “to establish a sustainable national investment fund as a strategic mechanism for strengthening investment activities of top-performing government financial institutions and thus pump-prime economic growth and social development.”

Why the rush for the House to approve the Maharlika fund bill – with Speaker Ferdinand Martin Romualdez and Finance Secretary Benjamin Diokno supposedly urging him to do so – even if no counterpart had been filed in the Senate?

Speaker Romualdez appears to have given one reason. At a press briefing Tuesday night in Brussels, he said: “If you ask me, why don’t we just certify [the bill] as urgent so if you go to Davos we can just talk about having a sovereign wealth passed through the House of Representatives and that will be a very, very exciting thing.” Huh?

Romualdez was referring to the World Economic Forum (WEF) annual meeting of leaders from global business, some governments and civil society to be held this coming January at the resort city of Davos, Switzerland. (He has been accompanying Marcos Jr. in his trips abroad.)

The annual gathering was initiated in 1971 by Klaus Schwab, a University of Geneva professor, who invited 444 executives from European companies to meet in Davos. His idea: introduce American business management approach to European firms, in the era of neoliberal economic globalization.

In his PhilSTAR column last Thursday, business executive Joey Concepcion also seemed to be in the know. “I think the President will go to Davos, and that’s another significant event where the top businessmen go once a year. I think you can see the President’s great intention is to sell the Philippines, and under his leadership … what can they expect if they invest in this country,” repeating what he told ANC’s Karen Davila in an earlier interview.

What do we gain from going to Davos? Davila had asked Concepcion, who has been to Davos himself. “I think it’s worth the trip,” he replied. “It’s very important that the President continues to attend these very high-profile events where the most successful businessmen attend. I think once they hear the President’s speech, I am sure they will be more optimistic in investing in the Philippines.”

Others are not so sure it’s always a great idea. For example, there’s a study, done in late 2019, by academics from the University of Berkeley in the US, the University of Goettingen in Europe and the National University of Singapore.

Titled “Does it pay to attend Davos?” the study was submitted to the 13th Annual Conference on the Political Economy of International Organizations, held in Vancouver, Canada in February 2020.  Here’s what they found:

• Attending Davos summits was costly for companies, with estimated costs of$40,000 per delegate (P2.3 million). Although 155 countries were represented, the meetings were dominated by the high-income countries.

• Attendance at Davos could generate a value-added for a company if it developed an economic network and bought valuable political support. On the other hand, it could be wasteful in the sense that it usually generates only private benefits for the attendees themselves, without measurable effects for their firms.

The study analyzed data on WEF attendees from the 2000-2018 period, matched these with firm-level data on stock market performance, using a methodology to test whether companies present at Davos performed better after their top executives had made the expensive pilgrimage to Switzerland.

“Our preliminary findings do not provide evidence that the most famous summit of global leaders creates direct value to businesses,” the study concludes.

So, will the expense be worth it, especially if the Filipino people are footing the bill? How does Marcos Jr. plan to sell the Philippines and his still half-baked MIF in Davos?

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