Sovereign guarantee

Our government officials have been overly trying to drumbeat the latest official travel abroad of President Ferdinand “Bongbong” Marcos Jr. (PBBM). In a pre-departure press briefing at Malacañang last week, it was announced the proposed Maharlika Investment Fund (MIF) will have a “soft launch” while PBBM is attending the World Economic Forum (WEF) in Davos, Switzerland this week.

In this press briefing, Carlos Sorreta, undersecretary for Multilateral Affairs and International Economic Relations at the Department of Foreign Affairs, disclosed PBBM will bring along to Davos the country’s key government officials and business leaders to join him in the annual WEF that will start today.

“The World Economic Forum is simply a great venue to do sort of [a] soft launch for our sovereign wealth fund, given the prominence of the forum itself and the global and business leaders who will be there and they will hear it directly from the president,” Sorreta cited. According to him, other countries and business leaders have also done similar “soft launches” of their local initiatives of business product at the WEF events in the past years.

PBBM will go to various meetings at the WEF as one of the only two leaders from Asia who will fly to Davos. First Lady Lisa Araneta-Marcos and the administration’s top economic managers flew yesterday with the President in his “sales pitch” for the soon to be created sovereign wealth fund of the Philippines.

PBBM is expected to return to Manila by Friday. Then he is off for a state visit to Japan in the second week of February. Malacañang earlier announced PBBM seeks to follow up his initial discussions on regional security concerns and economic matters with Japanese Prime Minister Fumio Kishida.

The President’s economic team, on the other hand, will continue the mission abroad to drum up interests of investors for the Philippine funds. From Davos, the economic team of Finance Secretary Benjamin Diokno, Socio-Economic Planning Secretary Arsenio Balisacan, Budget Secretary Amenah Pangandaman, and, Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla will fly next to Frankfurt and London.

These economic missions take place even while the creation of the proposed sovereign wealth fund is still being crafted at the legislative mills of the 19th Congress.

As usual, the President’s delegation to Davos included mainstays in his past seven foreign travels, namely, Speaker Ferdinand Martin Romualdez and Sen. Mark Villar. Romualdez is the principal author of the original House Bill (HB) 6398 seeking to establish the MIF as the country’s own version of a sovereign wealth fund. HB 6398, filed in Nov. last year by the Speaker, was revised to remove certain highly contentious provisions that met stiff public resistance.

As initially proposed, it was supposed to mandate the two State-run pension fund managers – the Government Service Insurance System (GSIS) and the Social Security System (SSS) – to contribute to the P250-billion seed capital of the proposed MIF. No less than the BSP Governor publicly opposed the provision mandating the BSP to invest part of its surplus to the MIF.

Thus, the original proposal went back to the drawing board. The House legislators led by Albay Rep. Joey Salceda, chairman of the House ways and means committee underwrote the new bill with major revisions. Recognized as the resident economist of the Lower House, Salceda worked out the revisions with the economic managers of PBBM led by Diokno. They went through again the mechanics of creating the proposed MIF and 22 amendments were put into the consolidated version of the various bills.

“We emphasized that the main object of the fund is ‘to promote economic development’ by making strategic and profitable investments in key sectors,” Salceda pointed out.

From “investment,” it is now dubbed as “sovereign development fund.”

In his traditional New Year’s address in our Tuesday Club last week, the BSP Governor told us he looks forward to further improvements of the proposed law creating the Maharlika funds. To clearly prescribe its purpose, Medalla pointed out, the proposed sovereign wealth fund should really bankroll development projects for the country.

It was while Romualdez and Villar were together in Brussels as official delegation of PBBM to the ASEAN-EU (Association of Southeast Asian Nations-European Union) Summit in Dec. 14 when the Speaker convinced the Senator to file the counterpart version of the MIF at the Senate. Villar chairs the Senate committee on banks, financial institutions and currencies. Enroute to Brussels, PBBM publicly welcomed the House initiated MIF bill. “It’s very clear that we need added investment. This is another way to get that,” PBBM cited.

With the President’s endorsement and upon the imprimatur of the Speaker, the House of Representatives approved swiftly the revised House MIF bills before they adjourned for the Christmas recess last month.

While they have yet to deliberate on it, Senate President Juan Miguel Zubiri believed the Upper Chamber will likely just adopt and improve upon the House-approved version of the bill. Zubiri disclosed in our Kapihan sa Manila Bay news forum last Wednesday, he was informed by Sen. Villar of this option to facilitate the targeted passage into law of the proposed MIF by June this year. Or this is before the first regular sessions of the 19th Congress adjourns sine die on June 3 this year.

Both Chambers will resume sessions on Jan. 23. Following the legislative calendar, the Senate and the House will have another recess for the Holy Week starting March 25 until May 7. Although not included in the list of priority bills agreed upon at the Legislative-Executive Development Advisory Council (LEDAC), the proposed MIF bill obviously got front-loaded with tacit approval by both sides.

Who would still oppose the sovereign wealth fund if spent for the development of the country? But sovereign guarantee remains a big concern as far as methinks.