OFFLINE: Why Maharlika is such a hard sell

The bi-cameral Congress may be preparing to railroad the so-called Maharlika Investment Fund into law, but will have to live with one undeniable fact – it does not have the public support they thought it would get.

There are many reasons for this lack of support, some valid some not.

For one, the very word ‘Maharlika’ has always been identified with the father of the current president, the late dictator Ferdinand Marcos, who even toyed with the idea of renaming the Republic of the Philippines into the Republic of Maharlika, or some variant thereof.

Another reason is that the country’s next door neighbor, Malaysia, had its own such fund, and it most certainly did not end well for countless Malaysians, who lost part or even all of their pension funds. The proponents may pay lip service to doing better than Malaysia, but few are buying it.

That this Maharlika fund will be launched with funding coming from the Government Service Insurance Corporation and the Social Security System without approval of the members of the country’s two biggest pension funds is also most disturbing.

As a retired Supreme Court senior justice pointed out, the SSS and the GSIS are owned by its members and all of the profits of both should go back to the members in the form of pensions and loans.

No one, but no one, is allowed to touch the SSS and GSIS funds except the members themselves. That’s an absolute. Yet here come proponents saying that they only plan to take the profits of both pension funds with the intention of investing them wisely.

If they believe the members will take their claim hook, line, and sinker, then they have another thing coming.

One more reason is the awful timing. As former senator Bam Aquino said, he had submitted a bill creating just such a fund in the past. Fellow senator JV Ejercito did the same thing, too. But their proposed bills never became law.

As Aquino said, the time when he filed his bill was when the Philippine economy was soaring. The country was considered as a rising tiger economy. Global investors were eager to plunk their funds into the country.

Not so, this time. The Philippine economy is still in a lame state. It’s recovering, they say, but even this claim is questionable.

Besides, the Marcos administration said that many investors were eager to place their funds in the Philippines, especially after the president visited the US earlier this year, when he had the chance to meet with some big players.

The Palace claimed that hundreds of millions of dollars would soon be coming in.

So why put up a mega fund which has the same purpose of investing in such things as infrastructure and large real estate projects?

Unsurprisingly, the likes of the Makati Business Club – arguably the country’s biggest business organization – was cool to the idea also.

One more key person whose support was barely lukewarm is the current Bangko Sentral ng Pilipinas governor, Felipe Medalla, who said he was uncomfortable with the thought of an investment fund taking control of the country’s dollar reserves.

I have listened to the arguments of the fund’s proponents, and some seem quite valid, even solid. But there remains a nagging suspicion that something can go very, very wrong.

As one opponent said, the initial executives who will handle the fund may be the best and the brightest in the business, but what about what happens down the road? What if a future president pads its board with his or her cronies? What then?

There have been previous cases of pension funds all but disappearing because of financial mismanagement. One big example that comes to mind is the Armed Forces of the Philippines’ pension fund, that went nearly belly up because the wise generals handling it believed they could dip their fingers on the fund owned by the men and women in uniform without regard for the consequences.

It was, in fact, an earlier version of the failed Malaysian fund. But unlike the then Malaysian prime minister who ended up in prison because he actively wasted the fund, the AFPSLAI (for Armed Forces and Police Savings and Loan Association, Inc.) lost much of its value due to mismanagement, with no one landing behind bars.

The law creating the Maharlika fund states that the President of the Philippines will head its board of directors.

Now honestly, has there ever been a Philippine president who was not a politician?

This leads to the next question, can any Filipino politician be trusted to handle billions of dollars of pensioners’ money? And can any of even the best investment minds guarantee that the Maharlika fund will earn substantial returns year after year, decade after decade?

I think not.

Still, the Speaker of the House – a cousin of the president, no less – has all but guaranteed that the Maharlika Investment Fund will be passed into law by yearend.

He is, after all, one of its proponents, along with a certain congressman named Sandro Marcos.

That’s right, folks. The favorite son of the current president is one of the lawmakers behind the bill. This is the same congressman who suggested not too long ago that Filipino farmers should stop planting rice and switch to dragonfruit instead.

His reason? Taiwan is a huge market for dragonfruit, which I love by the way. But that’s beside the point.

Since he became president, I’ve tried my darndest to at least give the guy the benefit of the doubt. I want him to succeed if only because millions of Filipinos suffered and continue to suffer because of the after effects of the coronavirus pandemic, as well as the vicious presidency of his predecessor.

The Republic of the Philippines is begging for a break. It needs the economy to recover soonest. It needs the serious problems that Bongbong Marcos  inherited from Digong Duterte to disappear, or at least be minimized.

The Maharlika Investment Fund or whatever it is that the proponents want to call it is not the solution the country is looking for.

Will it help?

I cannot say that it won’t. But I do have this nagging suspicion that somewhere down the road, perhaps after the second Marcos presidency is over, it will collapse like a house of cards, while the handful who mishandled it (on purpose, most likely) will be laughing all the way to hell with hundreds of millions of dollars in their Swiss bank accounts.

So it’s nothing personal. I just believe in the advice of the non-believers who say this Maharlika thing is an awful idea whose time is unfortunately now.