Maharlika fund: Déjà vu

Contrary to popular belief, “maharlika” does not refer to a ruling, noble, or upper class in pre-Spanish Philippine society. The confusion can be traced to the Sanskrit root word, maharddika, that refers to “a man of wealth, knowledge, or ability.” However, in its Philippine context, maharlika referred to a warrior class of free or “freed” men in ancient Tagalog society, equivalent to the “timawa” in Visayan society. In recent years, maharlika is often associated with Ferdinand Marcos Sr. who claimed command of a war-time guerilla group “Ang Maharlika” not recognized by the US according to documents preserved in the US National Archives.

Now we have the proposed Maharlika Wealth Fund whose initials I first mistook to mean Monday-Wednesday-Friday. Suspicion regarding the Maharlika Wealth Fund has a historical basis. In October 1898, the Malolos Republic authorized the issuance of bonds, not to exceed P20 million, a magnificent amount then, small compared to the billions and trillions we are counting in the 2023 national budget.

Although Emilio Aguinaldo brought back about P250,000 from the down payment of P400,000 made by the Spanish government to effect the ceasefire following the Pact of Biak-na-Bato, Aguinaldo needed more funds to keep the war and government running. On Nov. 26, 1898, Aguinaldo issued a decree stating his agreement with Congress for the republic to take on an interior loan of P20 million, to be redeemed 40 years from the date of issue. Subscribers to this loan were promised 6-percent interest payable annually, every six months. And if the Treasury saw fit to do so, interest could be paid every three months.

Apolinario Mabini, adviser to Emilio Aguinaldo, was suspicious of the men who proposed the bond, made it into law, and set out to administer it. Reading the fine print, Mabini opposed the loan. On the surface, the fund was to be managed by a board of 24 members who had each subscribed 50 shares. In reality, these 24 men would effectively run and fiscalize the National Treasury. Mabini identified the group as wealthy men from Manila, allied with his rival Pedro Paterno. In an undated memo, Mabini warned the president that this setup would be “worse than the Spanish regime.” He added that since “it is the Treasury that supports you, if you put this in the hands of the rich, you will necessarily be in their power.”

Mabini also opposed the establishment of a government bank if it would be managed by the cabal of vested interests from Manila. “After the bank is established, it will in reality be the one to manage the government inasmuch as the government will be its debtor.” Collateral for this P20 million loan was the property of the nation, rentals of all state property, as well as the issue of P3 million paper money redeemable in three years.

Mabini lamented: “I did not expect that these things could happen. Neither did I expect that you would grant the rich people these guarantees. We worked without pay; but the rich will not put up their money without a voice in the Treasury. It is probable that the Board members will ask for salaries. In this case, rich people will get all the benefit and the soldiers will remain hungry. The rich will press collection from tenants, administrators will pocket part of it, and only a little will go to government coffers. As collections will not be enough to pay the interest and amortization of the loan … you will have nothing to pay the people. In the end, the tenants and the employees will blame you, and the rich will have a big laugh.

“Inasmuch as you now count with many advisers, please allow me to resign. When you had no one, I worked by your side despite my ailment; now that you do not need me anymore, it is fair that I think of my health … As I said in the beginning, this will be the last time that I shall ever trouble you. It is not fair that I be held responsible for a thing which I have not done. May God enlighten you, inasmuch as in your hands lies the welfare or misfortune of the Philippines.”

Both loan and bank did not materialize, but Mabini fell from grace and was removed from office for doing his job. Was Mabini prophetic, did he foresee our problems a century ago? Mabini’s continuing relevance just proves that we have not changed much since the heady days of the First Republic.

Comments are welcome at [email protected]