Senator Risa Hontiveros flagged concerns about the proposal for a sovereign wealth fund (SWF), saying it is counterproductive to the nation’s economic goals.
Hontiveros believes the budget could better be used in responding to the urgent needs such as education, healthcare, and agriculture.
“An SWF is meant to come from excess funds we just don’t have, as seen by our trillions-worth of debt. We don’t need an SWF and we clearly can’t afford it anyway. Kakain lang itong SWF sa budget na kailangan natin para tugunan ang mga krisis. Dapat unahin ang mga urgent priorities natin. Just like the misplaced confidential funds, an SWF is an unnecessary and unjustified move,” she said.
“Lalo lang aakyat ang presyo ng bilihin kung itutulak natin ito. Hirap na hirap na yung mga kababayan natin bumili ng pagkain at gamot sa ngayon. Instead of helping Filipinos afford everyday needs, we will be making it even harder for everyone.”
The senator says this type of investment fund will falter in an oil-dependent nation like the Philippines, unlike its oil-rich neighbor Indonesia.
“Indonesia has those super profits from their coal and oil exports. We, on the other hand, have super trade deficits. So, considering today’s economic uncertainty, setting up the Maharlika Fund has neither rhyme nor rhythm. How can we set something aside for the rainy days, when our national budget itself is deficit-funded?” Hontiveros said.
“And even with Indonesia’s oil commodity boom, 90 percent of their SWF capitalization will be sourced from foreign institutional investors. We are not at this level at all,” Hontiveros stressed.
Currently, the country’s trade deficit is at 7%, suddenly among the highest in the world. The Senator also echoes BSP Governor Felipe Medalla’s warning that we actually suddenly need more dollar reserves for the foreseeable future, not less.
“These are the most difficult times for central bankers, like Gov. Medalla. Gumegewang ang piso. Malinaw na walang sobrang dollar reserves na pwedeng i-subi para sa gustong Maharlika Fund. I do hope we get to keep him on board, even after he has publicly disagreed with the DOF Secretary” she stressed.
Hontiveros also questioned claims that high demand for minerals could prop up the sovereign fund.
“Sec. Diokno said that he is wishing for a Philippine commodity boom in copper, nickel and other minerals that are presently in great demand. But we have yet to see any change on the horizon. Wala pa naman iyon,” the senator added.
The senator then urged Sec. Diokno to instead spend his time developing bankable and investment grade projects with the private sector, such as in housing, transport and renewable energy, that will attract idle domestic and foreign funds.
“We should focus on attracting different countries to invest in our projects. This is the better option to gambling the hard-earned pension of Filipinos in high-risk investments,” she said. “I will be sure to bring these points up on the Senate floor at the proper time. For now, this so-called Maharlika fund is setting off many alarm bells. Long-term consequences will be felt if we establish a sovereign wealth fund prematurely,” Hontiveros concluded.