MIF free from laundering

‘Even on our end, we will only deploy funds when there is a specific project to be paid for, so money laundering won’t just come into it’

No less than President Ferdinand “Bongbong” Marcos Jr. on Monday assured that his government will ensure that the proposed Maharlika Investment Fund — which remains pending in Senate — will not be misused for money laundering.

The Chief Executive defended the controversial measure anew, saying that the funds allocated for the sovereign wealth fund will not be disbursed at any time.

“Even on our end, we will only deploy funds when there is a specific project to be paid for, so money laundering won’t just come into it,” Marcos told reporters in an interview.

Lawmakers in the lower chamber initially proposed that its funding would come from the Government Service Insurance System with P125 billion, the Social Security System with P50 billion, LandBank with P50 billion, the Development Bank of the Philippines with P25 billion, and dividends and profits of the Bangko Sentral ng Pilipinas.

After a public backlash, however, they dropped the state pension funds GSIS and SSS as mandatory contributors to the proposed sovereign wealth fund.

Seed fund

The President stressed that these funds will serve as the seed money for the sovereign wealth fund.

“What will happen is the Maharlika fund will serve as the seed fund for the sovereign wealth fund… Now whenever we come into partnership, we do a G2G (government-to-government) with Japan for example or we do our PPP (public-private partnership) with some big outfit, then it is only the time that the money will be used for the program,” he explained.

He added that while “private monies” will be used for the proposed sovereign wealth fund, it will “not be used like a savings account.”

Marcos said that he agreed with Representatives Joey Salceda and Edcel Lagman, both from Albay province, that dividends from government-owned and -controlled corporations should not be used to fund the MIF.

“I agree with (them). You cannot use funds from the GOCCs. That’s a government fund. What will the government spend?” he said.

Marcos clarified that the idea to use dividends from GOCCs was a mere “proposal” during one of the meetings he attended at the 2023 World Economic Forum in Davos, where he “soft-launched” the proposed investment fund.

“It was a proposal. It’s not something that we have adopted,” the President said.

Using dividends from GOCCs to fund the MIF would be “too disruptive,” he added.

In a television interview last week, Lagman argued that the proposal to require GOCCs to remit half of their earnings to the national government would violate the 1993 law — to which Marcos agreed.

Own charter

“I think every single GOCC has its own charter. You will then revise all those charters to align with the Maharlika fund. That is not the purpose of the GOCCs,” Marcos said.

“This is a lot of income that goes to the national government that will suddenly disappear. Sorry, not disappear, but will go to the Maharlika fund and cannot be used for the (national budget),” he added.

The President emphasized that GOCC dividends will be better used to allocate funds for programs proposed under the national expenditure plans.

“We have many things that we would like to appropriate in the coming years, and we will need those funds. So, I don’t think that that’s a viable proposition, at least not for us,” he said.

“I’ve seen, I know that there are other sovereign wealth funds that did it that way, but it’s not appropriate for us, we are a little lukewarm about that idea.”

Moreover, Marcos vowed to reduce his foreign trips this year, saying that his government would instead focus on making sure that the investment pledges, which he received during his previous trips, will materialize.

“We will reduce our trips a bit for the rest of the year… We need to go back to all these things that were started in ASEAN, in APEC, in China, in the EU, in Brussels, and in Davos,” Marcos said.

“We haven’t talked about (the investment pledges) in detail because we have been busy traveling.”

He made the remark when asked how his administration plans to ensure that the investment commitments he acquired from his first eight official foreign trips will be converted into actual projects.

In January alone, the President traveled to two countries: China (state visit) and Switzerland (working visit).

Marcos is reportedly traveling to Japan for a state visit next month and to the United States for the second time to attend the Asia-Pacific Economic Cooperation Summit in November.

Cost-benefit

Meanwhile, he dismissed criticisms that the government has been spending too much on his travels abroad.

“I don’t know the exact figures of the cost and everything, but for example, we came back from China with pledges of P22 billion. Let’s say we get actual out of that P1 billion. Recover all the costs of the eight trips, finished,” he said.

“The measure of success will be cost-benefit. How much effort did you put into it? It’s not just the money. It’s the time, the effort that goes into it.”

Inflation

Marcos said he is “losing sleep” because of thinking about how to resolve inflation in the country, which hit 8.1 percent in December 2022.

According to the Philippine Statistics Authority, the figure put the annual average of inflation at 5.8 percent.

“This year, the problem that keeps me awake (is) inflation. That’s why I lose sleep every night… thinking about how to bring down inflation,” he said.


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