Scrap Maharlika Investment Fund, do not tinker with GFIs
Based on 2021 Commission on Audit report, here are the key Land Bank of the Philippines figures (in trillions):
- Assets – P2.594 (100 percent)
- Liabilities – P2.374 (91.53 percent)
- Equity – P220 (8.47 percent)
If you get P50 billion and invest it in the Maharlika Investment Fund (MIF), the Landbank equity will be reduced by P50 billion and P50 billion will be deducted from the cash assets of Landbank, the main reason for the fear of the military and uniformed personnel (MUP) because Landbank is the depository bank of their salaries and pensions.
The first person who should have objected against the MIF should have been Finance Secretary Benjamin Diokno because no economist worth his salt will not object to it. But he did not.
The following are reasons why the MIF should be scrapped:
- With the P13.91 trillion national debt as of April 30, 2023, there is no money to invest in MIF (sovereign wealth fund is feasible only if the government has excess funds);
- You do not tinker with the government financial institutions because they have their respective mandates, and the equity of the government is a small minority (8.47 percent – Landbank, 6.7 percent – Development Bank of the Philippines (DBP), 1.8 percent – Bangko Sentral ng Pilipinas);
- Landbank, DBP, Social Security System, Government Service Insurance System, etc. have their own departments and expert people who invest their investible funds, therefore there is no need for MIF;
- If there are worthy government projects that need funding, government financial institutions, local private banks, and international banks can finance them. There is no need to create MIF;
- The MIF bill provides for 2 percent of the total fund for the overhead of the proposed Maharlika Investment Corp. (MIC), a big waste of money;
- The investment portfolio of MIC is highly speculative; and
- Diokno, the incoming chair of MIC, cannot be trusted.
Based on the foregoing considerations, and on behalf of the suffering Filipino people, please veto the MIF bill and immediately fire Diokno as secretary of finance.
RET. Col. Hector Tarrazona,
financial and management consultant
AIM Scholar, AIM MDM 1991
PMA Class 1968
