Maharlika fund proposal needs more media scrutiny

This Week in Media (June 5 to 10, 2023)

THE MAHARLIKA Investment Fund (MIF) has proven to be the most controversial bill so far under the administration of President Ferdinand Marcos Jr. While it was not identified as priority legislation in Marcos’s first State of the Nation Address last July 2022, the proposal breezed through both legislative houses in only seven months after Marcos certified the bill as urgent.

Economists and finance analysts have consistently challenged the MIF while under deliberation in the House of Representatives and the Senate, raising among other concerns the designation of government banks as sources of seed capital; the governance structure for the MIF that is decided by the president; and the general weakness of the global economy that does not guarantee investments. But Marcos’s economic managers and the proponents are insistent that the bill has enough provisions that will address these concerns.

Media reported the key points of a discussion paper that the UP School of Economics presented to the public on June 6, but Finance Secretary Benjamin Diokno dismissed those concerns. The proposal as approved on the bicameral level on May 31 is now ready for transmittal to Marcos’s office.

LandBank’s Status

It was curious then that the Bureau of Treasury called on account holders in Land Bank of the Philippines not to pull out their money or close their accounts. LandBank is supposed to contribute PHP 50 billion to the MIF as stipulated in the proposal. GMA News Online, news.ABS-CBN.com and Manila Standard Online reported that in a weekend forum last June 3, Rosalia de Leon, the national treasurer, assured that PHP 50 billion is less than three percent of the bank’s investible funds. De Leon said that LandBank is “stable” in terms of assets, so fears that the bank would go bankrupt should the MIF fail are unfounded. 

The follow-up on this angle was insufficient. Reporters did not ask why de Leon had to make that public appeal. Is LandBank already monitoring account closures at this time?

Reports did not emphasize the importance of the LandBank as a government financial institution. While the authors of the MIF bill have explicitly excluded the Government Service Insurance System (GSIS) and the Social Security System (SSS) as sources of seed capital, pension funds particularly for government employees are placed in LandBank. Diokno’s statement that the GSIS and SSS can still “subscribe” to projects funded by the MIF did not help inspire public confidence, as senators were also quick to rebuff his interpretation of the bill.

Only BusinessWorld followed up with economists who said lawmakers did not take into consideration LandBank’s health when they were drafting the MIF bill. Kyle Aristophere Atienza’s report cited expert observations that LandBank’s credit rating might plummet if the MIF fails. Fitch, the international credit rating agency, has already warned that the outlook for LandBank might go from “stable” to “negative” if it is forced to contribute to the Maharlika fund.

Finishing Touches?

Speaking to the media on separate occasions, senators Joel Villanueva on June 6 and Mark Villar on June 8 said “finishing touches” were being applied to the MIF bill before its transmittal to the Office of the President. They both assured reporters that the changes being made were just “minor” and had nothing to do with amending provisions, some of which included the penalties that had been described as contradictory by critics.

There was no immediate question from the media as to the need to change anything after approval by the bicameral committee. But Sherrie Ann Torres and Xave Gregorio, covering the Senate for ABS-CBN and Philstar.com, respectively, did seek comments from former Senate presidents later on the issue of amending bills outside plenary. Franklin Drilon, Vicente Sotto III, and Aquilino “Koko” Pimentel III all agreed that Marcos could convene a special session to discuss the proposal in plenary again. Gregorio noted the potential criminal aspect of amending the bill outside the plenary — that any unauthorized person who alters legislation can be punished with a six-year imprisonment and a fine of up to PHP 1.2 million.

Correcting Bills

In an interview with One News’ The Big Story on June 9, Sotto reiterated that correcting bills that have been ratified by the bicameral committees has never been done. He cited a bill in the 1990s that had to be reverted to plenary even when only a single word (“is” to “are”) had to be changed.

Asked by anchor Regina Lay whether Sotto thought the bill was rushed, he answered yes, also emphasizing that a president certifying a bill as urgent does not mean lawmakers are required to pass the proposal right away.

Media have not taken a step back to analyze the chain of events: the overwhelming support in the House, the eagerness of the Senate to pass the bill in plenary, to the House’s unquestioning adoption of the Senate version for bicameral approval. Marcos himself had admitted that the MIF was his idea, presenting only the need for investments and little more to argue for its necessity. His economic managers who were initially doubtful about the fund quickly gave it their full support. But media did not interrogate the change of mind of Arsenio Balisacan, Socioeconomic Planning Secretary and Felipe Medalla, Bangko Sentral ng Pilipinas Governor.

The MIF demonstrates that, public outcry notwithstanding, whatever the president wants, the president gets. Newsrooms must be vigilant about how power and influence are dispensed by officials especially when it involves public funds.