Senator: Maharlika Fund a leap into unknown
Sen. Francis “Chiz” Escudero—Senate PRIB
Sen. Francis Escudero on Friday raised his eyebrows over the uncertainties in the return on equity that two state-owned banks would be mandated to place in the envisioned Maharlika Investment Fund (MIF), which the Senate intends to approve before the legislative break next week.
Escudero, who used to chair the Senate banks, financial institutions and currencies committee, reiterated that the seed money that the Land Bank of the Philippines and the Development Bank of the Philippines (DBP) would put in the MIF should earn more than its current average investment yield of 6 percent.
The veteran lawmaker described Senate Bill No. 2020, or the proposed Maharlika Investment Fund Act of 2023, as a “leap of faith to the great unknown.”
Under the measure, Landbank would be required to contribute P75 billion, while the DBP would provide P25 billion for the government’s common stocks in the Maharlika Investment Corp., which will be established to manage the country’s first-ever sovereign fund.
“The question is simple: Will the [MIF] give more than what these two banks are presently earning from their investments?” Escudero said in a statement.
Article continues after this advertisement“If there are doubts, then why are they very aggressive in marketing this bill?” he asked. “The idea here is to grow the money of Landbank and DBP, not to be in the red.”
Article continues after this advertisementThe measure, he reiterated, should put in more guarantees on the return on investment since the two state banks would be compelled to bankroll the MIF.
The MIF’s average yield should be in the “two-digit zone” to make it more worthwhile for Landbank and the DBP to gamble its investible funds, according to Escudero.
“If a ten-peso headache pill carries [a] therapeutic guarantee, then why can’t a fund with a price tag in the hundreds of billions [of pesos] do the same?” he said.
“In any investment pitch, profit is the most important bottom line. An investment is made because one is convinced that it will make money,” he said. “Not behest. Not something coerced through legislation.”
Senate President Juan Miguel Zubiri on Thursday said the chamber would pass the MIF bill before the adjournment sine die of the 19th Congress on June 2 after President Marcos certified as urgent the passage of the measure.
Zubiri said its passage would be faster if the House of Representatives would agree to just adopt the Senate version to do away with the bicameral conference committee to iron out their differences in the bill.
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