NOW: 1Sambayan holds online forum on the Maharlika Investment Fund bill.
Present are ex-SAJ Antonio Carpio, ex-COA Commissioner Heidi Mendoza, labor leader Atty. Sonny Matula, ACT NCR union president Ruby Bernardo, and ex-BSP deputy governor Diwa Guinigundo.
Present are ex-SAJ Antonio Carpio, ex-COA Commissioner Heidi Mendoza, labor leader Atty. Sonny Matula, ACT NCR union president Ruby Bernardo, and ex-BSP deputy governor Diwa Guinigundo.
ACT NCR union president Ruby Bernardo likens Maharlika Investment Fund to a "sugal" or a gamble.
Labor leader Atty. Sonny Matula says House lawmakers did not thoroughly study the bill. It was passed a few weeks after it was filed.
Labor leader Atty. Sonny Matula says House lawmakers did not thoroughly study the bill. It was passed a few weeks after it was filed.
Former BSP deputy governor Diwa Guinigundo says what Congress wants is to get limited funds from state-owned banks LandBank and DBP to invest in speculative, risky investments.
"What gives them the impression that this modality will give them a better result?"
"What gives them the impression that this modality will give them a better result?"
Guinigundo: "Instead of these funds (P50B from Land Bank and P25B from DBP) going directly to business borrowers, this bill tells us to wait until the investments yield better results."
Says entrepreneurs need funds now, not tomorrow.
Says entrepreneurs need funds now, not tomorrow.
Guinigundo warns that if Maharlik Investment Fund fails, it "could send tremendous shockwaves to entire banking system."
His reminder: Our government has deposits in Landbank and DBP, which could be affected.
His reminder: Our government has deposits in Landbank and DBP, which could be affected.
What if Land Bank and DBP fail because it has to contribute P75B to Maharlika Investment Fund? Under the revised bill, Guinigundo says BSP is mandated to bail them out, using public funds.
BSP will contribute 50% of its declared dividends to Maharlika Investment Fund, the other half it will keep until such time its P200B capitalization is reached.
Guinugundo: "It is a direct assault on the independence and autonomy of the BSP."
Guinugundo: "It is a direct assault on the independence and autonomy of the BSP."
Guinigundo says the proposed Maharlika Investment Fund set-up will violate the BSP Charter, which mandates that the BSP shall not acquire shares of any kind or in the management of any enterprise.
Guinigundo points out other countries which have sovereign wealth funds have excess income: Botswana (diamond mining), Norway (petroleum).
Guinigundo says we have none of that citing large fiscal deficits and debts.
"It is neither necessary nor desirable. Talo po tayo dito."
Guinigundo says we have none of that citing large fiscal deficits and debts.
"It is neither necessary nor desirable. Talo po tayo dito."
Former COA Commissioner Heidi Mendoza says that retirement benefits are disbursed through Land Bank so people should not rejoice just yet that SSS and GSIS pension funds will no longer be sources of seed money for Maharlika Investment Fund.
Ex-SC Sr Associate Justice Antonio Carpio says the Maharlika Investment Fund is actually funded by debt because PH natl govt is currently operating on deficit spending and has been borrowing to finance deficit.
Expected to borrow P1.47T next year to meet deficit.
Expected to borrow P1.47T next year to meet deficit.
Carpio: The PH never had surplus revenues for several decades now.
National govt already in deficit, any disbursement from general fund means corresponding decrease in funds.
Estimated debt is 13.64T as of end of December 2022.
Says MIF is a question of wisdom, not legality.
National govt already in deficit, any disbursement from general fund means corresponding decrease in funds.
Estimated debt is 13.64T as of end of December 2022.
Says MIF is a question of wisdom, not legality.
Carpio says annual cost of putting up, operating Maharlika Investment Fund will exceed expected returns. MIF is expected to earn only 7-8% in annual return, lower than the interest on debt servicing and cost of operating fund.
"This is a losing proposition."
"This is a losing proposition."
Carpio points out PH's current debt-to-GDP ratio is 64% and is expected to rise to 68% next year.
Says debt-to-GDP ratio of more than 60% not healthy in terms of capacity to pay.
Adds PH should focus first on returning debt-to-GDP ratio to pre-pandemic rate of 40%.
Says debt-to-GDP ratio of more than 60% not healthy in terms of capacity to pay.
Adds PH should focus first on returning debt-to-GDP ratio to pre-pandemic rate of 40%.
Guinigundo addresses comparison with Singapore wealth fund:
-SG has surplus
-SG has a high credit rating (AAA) which means lower interest rate when they borrow
Says that in other countries, what are being invested are resource-based surplus funds.
-SG has surplus
-SG has a high credit rating (AAA) which means lower interest rate when they borrow
Says that in other countries, what are being invested are resource-based surplus funds.
Guinigundo also flags that those who will run Maharlika Investment Funds will be mostly politicians.
Lawyer Howard Calleja warns Maharlika Investment Funds will effectively comingle public and private funds.
Hits lawmakers, accusing them of surrendering the power of the purse.
"If we have rubberstamp Congress, walang safeguard na mangyayari."
Hits lawmakers, accusing them of surrendering the power of the purse.
"If we have rubberstamp Congress, walang safeguard na mangyayari."
Guinigundo says what's more important is to spend on education, health and right wage because these derive value beyond the 7-8% expected returns from the stock market.
Says we should prioritize paying our debts and reduce debt-to-GDP ratio to 39.7% before the pandemic.
Says we should prioritize paying our debts and reduce debt-to-GDP ratio to 39.7% before the pandemic.
Is the Maharlika Investment Fund just a smokescreen to bring back Marcos ill-gotten wealth from foreign banks? Carpio says this is speculative and he has no information for now.
Guinigundo explains further possible impact of MIF on Land Bank and DBP. Says that putting up seed money for MIF will lead to lesser loanable funds while paying interests to depositors.
"Magkakaroon ng problema in the future."
"Magkakaroon ng problema in the future."
Guinigundo flags that the BSP only has capitalization of P50B while deposits amount to the tens and trillions of pesos. Says this is not enough in case of a crisis. BSP Charter raised capitalization to P200B but it has yet to meet this amount.
Calleja warns that SSS and GSIS pensioners should still be wary because they can still invest in MIF.
Suggests that lawmakers instead invest their pork barrel funds in MIF.
Says reducing 10-20% corruption index to just 5% will result in substantial funds saved.
Suggests that lawmakers instead invest their pork barrel funds in MIF.
Says reducing 10-20% corruption index to just 5% will result in substantial funds saved.
Carpio says we have to put some common sense to what we do. Says 64% debt-to-GDP ratio is very high.
"It doesn’t make sense that we borrow when the interest is high. We should put our house in order first."
"It doesn’t make sense that we borrow when the interest is high. We should put our house in order first."
Guinigundo says there are more urgent issues PH needs to attend to such as the very high inflation rate and the big deficit.
WATCH the full 1Sambayan virtual forum here:
facebook.com/18817291042387…
facebook.com/18817291042387…
For more on the impact of Maharlika Investment Fund on Land Bank, DBP and BSP, watch this #ANCRundown discussion with Prof. Enrico Villanueva, UPLB senior lecturer of money and banking.
This was before House passed bill on 3rd reading but still applies.
This was before House passed bill on 3rd reading but still applies.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
