There is a storm brewing on the proposed Maharlika Wealth Fund bill introduced in the Lower House of Congress by no less than the first cousin of President Marcos Jr., Speaker Martin Romualdez Marcos, and presidential son, Deputy Speaker and House Majority Floor, Ilocos Norte Congressman Sandro Marcos. A formidable tandem. Reportedly, it has the imprimatur of PBBM, and it is supported by another influential political figure, former President and Speaker Gloria Macapagal-Arroyo. It is therefore unsurprising that the proposed bill has passed the usually slow legislative process in record time.

There is absolutely no question about the intention of MWF. It is noble but there are serious and valid concerns that must be addressed by the proponents, and for that matter by Congress, and the present administration as well.

The sources of funding of the MWF will be the Social Security System, Government Service Insurance System, LandBank, Development Bank of the Philippines, Bangko Sentral ng Pilipinas, PAGCOR, and other government financing institutions.

Under the proposed Act, the MWF will start with a P250 billion fund — P25 billion will come from the national budget annually, P50 billion from SSS, P100 billion from GSIS, P50 billion from DBP, PAGCOR's share is 10 percent of its gaming revenues, while the BSP will give 50 percent of its dividends.

Several business groups have expressed opposition to the proposed bill. The largest of them, The Philippine Chamber of Commerce, speaking thru its President, George Barcelon, said it is important for the country to maintain its credit standing "as debt watchers S&P Global Ratings, Fitch Ratings and Moody's Investors Service have maintained the Philippines' investment grade rating amid a recovering country."

To Barcelon, the foundation to have an excellent credit standing has been laid down by the previous administration hence we should move forward and not jeopardize it by creating a sovereign fund that could be perilous as its success would depend on fluctuating factors.

Other trade groups chimed in with their disagreement. The Foundation For Economic Freedom, Financial Executives Institute of the Philippines, Makati Business Club, and the Management Association of the Philippines, have issued a joint statement, to wit:

"The LandBank and DBP deposits exist because of the requirement for GOCCs to deposit their funds in government financial institutions."

"There is no creation of wealth or generation of new deposits but mere round-tripping, when funds of the LandBank and DBP are diverted to wealth find."

The business groups warned that the actuarial solvency of pension funds intended to benefit the SSS and DBP members could be in peril.

From the legal standpoint, the sourcing of funds from the SSS and GSIS is legally challenged.

They are private, not public. Only the members of these institutions can benefit from their contributions. The government only holds those funds in trust.

Moreover, the Middle East countries which have sovereign wealth funds are amassed in petrodollars. They have so much surplus in money, while our country is indebted by billions, and it could reach even more than a trillion. The priority of the government should be responding to the basic needs of the people, including education, health, employment, etc.

The concerns raised by oppositors are valid. They should be addressed at. There is a need for a re-evaluation by the proponents. The issue of a potentially huge source of corruption cannot be underestimated or dismissed. The Singapore experience is different, it is run by private citizens with unsullied reputations. They bring with them the badge of integrity. What happened to the wealth fund of Malaysia, whose handlers are now in jail, should caution us of a potential deja vu.

It will do well for the present administration to make a thorough review of this Maharlika Wealth Fund. A miscalculation on this burgeoning issue could be fatal.

(To be continued)