EDITORIAL - Undue haste

Last year, within a record 17 days from filing to final approval on third reading, the House of Representatives rubberstamped the Malacañang-certified bill creating the Maharlika Investment Fund. The passage in mid-December was rushed apparently so that President Marcos and his economic team could have something to tout while attending the World Economic Forum in Davos, Switzerland weeks later in January.

On the way to the Senate, the MIF proposal morphed into something unrecognizable, from its nature to its funding sources to its management. The original proponents retreated from their plan to tap state and private pension funds – but this plan could still be restored. Even investment bankers are still seeking clarity on the proposal.

Critics have said the country does not have surplus assets to set up a sovereign wealth fund. Instead what the country has is P13.86 trillion in national debt as of end-March, with about P1 trillion added to that debt pile by the new administration in its first nine months alone.

There is resistance to the continuing push for the inclusion of funds from the Development Bank of the Philippines, Land Bank of the Philippines and the Bangko Sentral ng Pilipinas, with fears raised that it would compromise the independence of the BSP. Opponents of the proposal have also pointed out that if the MIF becomes an investment fund, it could merely duplicate the functions of the DBP and Landbank, but at substantial additional costs paid to the fund managers.

Given the scandals in this country, warnings have been raised that the fund could turn out like the multibillion-dollar 1Malaysia Development Berhad sovereign wealth fund, whose abuse and mismanagement sent former Malaysian prime minister Najib Razak to prison for corruption, with his wife Rosmah Mansor also landing behind bars for bribery offenses. Critics have also stressed that this is a bad time to set up a sovereign wealth fund or state investment fund amid the global financial turmoil.

All these concerns make the push to railroad the MIF bill through Congress mystifying. The economic team reportedly wants the Senate version passed on third and final reading before Congress adjourns on June 2, so that President Marcos can sign it into law before his second State of the Nation Address on July 24. Such undue haste involving billions in public funds guarantee a bad start for the MIF.