February 3, 2023

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Ex-cabinet heads join call for abolition of Maharlika Fund

Former cabinet officials lamented the weak rationale and objectionable features of the proposed Maharlika Wealth Fund (MWF) and backed opponents for its “lack of principles of prudent regulation and risk management, avoidance of conflicts of interest, transparency and accountability.” ”

Fellows and members of the economic think tank Action for Economic Reforms (AER), faculty members and professors emeritus from the University of the Philippines (UP), Ateneo de Manila University and other universities, and former senior government officials, including former cabinet secretaries and undersecretaries, called for the executive branch and the Congress to repeal the law creating the MWF.

Among the group’s signatories are: UP Professor Emeritus Solita Collas-Monsod, Dr. Maria Socorro Gochoco-Bautista, Dr. Emmanuel S. de Dios, Dr. Edita A Tan and Dr. Maria Serena I Diokno; former Deputy Governor of Bangko Sentral ng Pilipinas (BSP), Diwa C. Guinigundo; former Treasury Secretary Milwida M. Guevara; former secretaries of the National Economy and Development Agency Cielito F. Habito and Dante B. Canlas; Emmanuel F. Esguerra, former Executive Vice President of Neda; former Assistant Secretary of the Treasury Maria Teresa S. Habitan; former Secretary of Tourism Alberto A. Lim; and Florencio B. Abad, former Minister of Budget and Administration.

In a statement reiterating their firm opposition, they cited reasons including: lack of prudential regulation and risk management principles; avoidance of conflicts of interest; Transparency; and accountability.

The signed statement complained that “this muddled, contradictory and redundant bill will only doom the MWF and only allow for nepotism, hiring and corruption”.

Despite the elimination of the GSIS and SSS pensions as sources of funding for the MWF, AER Executive Director Filomeno S. Santa Ana III noted that “the premise of the proposal is questionable and its timing inappropriate”.

“Even if we get the concept right, we always come back to the question: What is the fund for?” Santa Ana said. “We just don’t have the right credentials for a sovereign wealth fund because a sovereign wealth fund is being created to solve the problem of a surplus we don’t have.”

In addition, he said that “since GNP dividends typically go to the national government, allocating those dividends to the MWF would pose a huge opportunity cost to our national government agencies and our annual funds.”