PBBM allies must support MWF
The MWF Bill is a brilliant idea because it will simply allocate government sources of revenue from the yearly national budget to a Fund that has the flexibility of a sovereign wealth fund.
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The MWF Bill is a brilliant idea because it will simply allocate government sources of revenue from the yearly national budget to a Fund that has the flexibility of a sovereign wealth fund.
Most of the mainstream media present to us a narrative that the Maharlika Wealth Fund is a bad idea for several reasons: One, the timing is bad due to the poor economic climate; two, we have a bad reputation for managing funds; three, a source for potential corruption and looting; and fourth, conflict of interest in the authors of the MWF Bill.
To me, the MWF is a game-changer. It may be the biggest legacy of Marcos presidency. I have already discussed some of the issues in the previous article why I am in favor of the creation of the MWF and why the benefits of creating it outweigh the fears, which I consider mostly ostensible.
The MWF Bill is a brilliant idea because it will simply allocate government sources of revenue from the yearly national budget to a Fund that has the flexibility of a sovereign wealth fund. With professional management, it can continue to grow and produce economic benefits now and in future generations.
The national budget is primarily allocated by Congress through the General Appropriations Act. Since the GAA is prepared by politicians with parochial and territorial concerns, you can expect that most of the appropriations will cater to short-term parochial and territorial concerns and not really to long-term intergenerational development. Because of this vicious cycle, our national government has had little contribution to building big-ticket infrastructure projects and left most of these to the private sector.
Note that the capitalization of the MWF will be sourced from government financial institutions which contribute to the yearly national budget. Removing a small portion of budget allocation to the GAA and putting them into a fund, which, instead of being put to waste thru "waiting sheds" and multi-purpose basketball courts, can be invested as equity to big-ticket
infrastructure projects, high-return blue, and green projects, and countryside development, including agriculture.
The MWF is designed to source funds for windfalls and royalties from natural resources, such as extracted minerals from mining, sale of frequencies, grant of rights, etc. I heard Bangko Sentral ng Pilipinas Secretary Benjamin Diokno, in an interview, asserted that the government, potentially the MWF, should make money out of the telecom bandwidth or frequencies, from the reclamation of properties, and the extraction of oil and gas and minerals, among others, instead of giving them away, through franchises, licenses, etc.
The government can, in turn, use these funds not to produce Wolf of Wall Street, but participate in and reap the benefits of our country's economic growth. The funds can be invested in equity for toll road projects, which currently generate returns of 20 percent, instead of investing in financial assets that can generate only three to six percent.
The Philippines has a large market of consumers, and our economic growth is driven by consumption. The government should invest in its own development. I recently learned that the BSP had an average annual revenue for the past three years hovering at P27 to P30 billion.
The National Grid Corporation of the Philippines, which was awarded a business contract by the government, currently earns a guaranteed revenue of P45 billion. Given the government guaranteed this contract for 25 years, when it is time for review and renegotiation in 2029, the MWF can come in so that the public (compare to a private few) can participate (through equity) in the windfall of this monopoly of the power transmission business.
Indeed, the MWF gives President Marcos and the succeeding presidents after him, the fiscal flexibility left primarily to Congress through the GAA.
I do not believe that the MWF will be used by the Marcos administration as a rope to hang itself. In fact, the performance of the MWF will be an assessment of the performance of the Marcos presidency and all the others succeeding it. As it is being shaped now, the MWF will be the Marcos administration's primary instrument for its economic development agenda for inclusivity and sustainability.
President Marcos is investing a lot of his political capital in this undertaking and the passage of the MWF Bill will be a test for his political allies.
In my opinion, those who supported the candidacy of the President must support the creation of the MWF. The MWF Bill is an important piece of legislation for the President. It is seen by the President and his economic managers as a driver of economic transformation for the country.
