THE economic team of the Marcos administration gave stability and coherence to a Philippines exposed to Covid and VUCA (volatility, uncertainty, complexity and ambiguity). That it was the first to be named and members of which were suggested by then BSP governor Benjamin Diokno was a very bold move. All talking in one language, rowing in one direction with agreement readily had was welcoming in the light of the need to reboot and rebuild, not from where we were before but toward a new direction and hopefully, a better development model for the country.The 8-point socioeconomic agenda was clearly laid out: Protect purchasing power and mitigate socioeconomic scarring. Reduce vulnerability and mitigate scarring from the Covid-19 pandemic. Ensure sound macroeconomic fundamentals. Create more jobs. Create quality jobs. Create green jobs. Uphold public order and safety, peace, and security. Ensure a level playing field. Through the government's socioeconomic agenda, the Marcos administration targets to lower by 9 percent the poverty incidence by 2028 and increase the number of middle-income Filipinos. The government's goal in 2022 is to increase the gross domestic product growth rate to 7.5 percent from 6.5 percent, while its target by 2023-2028 will be 8 percent from 6.5 percent.And then comes the Medium-Term Fiscal Framework (MTFF), which serves as the 'government's blueprint to steer the economy back to its high-growth trajectory.' The Senate (Concurrent Resolution 3) and the House of Representatives (Concurrent Resolution 2) approved the 2022-2028 MTFF. House Concurrent Resolution 2 was adopted on Aug. 1, 2022 while Senate Concurrent Resolution 3 was adopted on Sept. 12, 2022. The Senate version was later adopted by the House as an amendment to its version.The 8-point socioeconomic agenda under the MTFF comprises the following focus areas: 1) food security; 2) improved transportation; 3) affordable and clean energy; 4) health care; 5) social services; 6) education; 7) bureaucratic efficiency; and 8) sound fiscal management.Then there was the first presentation and debate of the National Expenditure Program (NEP) with the macroeconomic assumptions thrown out of the window because of Ukraine and the global inflation which resulted in our own battle on food inflation, the main cause of spikes in our basket of goods. But no adjustments were made in the proposed GAA (General Appropriations Act) and on December 16, BBM signed the P5.268-trillion budget. Clearly, when the NEP was submitted to Congress, the Department of Budget and Management (DBM) requested that if amendments would be introduced, these should be in sync with the MTFF and the 8-point socioeconomic agenda.The bicameral committee of the 19th Congress approved the 2023 budget bill on December 5, a record of sorts, giving more stability and predictability to how things will shape up in the coming year. And as Congress was rushing the budget, a measure was filed in the House on the creation of a sovereign wealth fund. Was there conscious and deliberate debate? Any policy study on the matter?Maharlika saw its rebirth in House Bill 6608, the revival of the use of the name Maharlika to refer to the sovereign wealth fund being pushed by the administration. Said measure was filed on November 28, made public around December 2. Committee Report 237 was made on December 12 and immediately, it was part of the order of business of the House of Representatives and was passed on third reading on December 15 by a vote of 279 in favor and six against. The maneuverings were made outside the public glare, even while the opposition was becoming more consolidated across stakeholders.The Maharlika (freeman or freedman) were the 'feudal warrior class in ancient Tagalog society in Luzon. They belonged to the lower nobility class similar to the Timawa of the Visayas. In modern Filipino though, Maharlika is referred to aristocrats or to royal nobility.'Last Feb.13, 2018, BBM suggested the renaming of the country into Maharlika. This was not new since it was during the time of his father, President Ferdinand E. Marcos Sr., when it was used prominently. The senior Marcos used the word 'Maharlika' 'to promote an authoritarian view of Filipino nationalism under martial law, claiming that it referred to the ancient Filipino nobility, including the kings and princes of ancient Philippine society.' Maharlika became a trendy name for 'streets, edifices, banquet halls, villages and cultural organizations. Marcos even used it to name a highway, a broadcasting corporation, and the reception area of the presidential residence and seat of power.'In 1978, Marcos Sr. supported the initiative of then senator Eddie Ilarde, who proposed to rename the Philippines 'Maharlika,' citing the need to 'honor the country's ancient heritage before the Spanish and Americans occupied the country.' There was also a claim that Mahárlika was the name of the guerrilla force that Marcos Sr. reportedly led during World War 2.And so, the cross of Maharlika has been passed from World War 2 to the current dispensation. What now becomes of the MTFF? Of future GAAs where projects financed from the budget are lodged? How about the PPP (public-private partnership) mode? What projects will be funded by the 'independent Maharlika Investment Fund'? Will these investments bypass sovereign guarantees? Can foreign direct investments be placed in the said fund as an equity investment once established?Removing private fund contributions from SSS (Social Security System) and GSIS (Government Service Insurance System) and making the secretary of Finance as chairman instead of BBM does not make the measure fly since LBP (Land Bank of the Philippines), DBP (Development Bank of the Philippines) and even BSP (Bangko Sentral ng Pilipinas) went into bailouts and recapitalizations in the past. Have we not learned from it?As it is, a new redundant corporation is being set up, exempting itself from every imaginable law: GOCC Governance Act of 2011, tax exempt from local and national taxes, direct or indirect, Procurement Act, Salary Standardization, Dividends Law, and the Disposal of Government Assets laws. What happens to current departments, agencies and GFIs (government financial institutions) handling project review and approval, investments, etc.? Will they fold up? Who will now be the point agency in terms of investments? What would be the role of implementing agencies such as DPWH (Department of Public Works and Highways), DoTr (Department of Transportation), DICT (Department of Information and Communications Technology), etc.? How will it impact the NEDA (National Economic and Development Authority) approval process?The objectives of MIF are 'to generate consistent and stable investment returns with appropriate risk limits to preserve and enhance long-term value of the Fund, obtain the optimal absolute return and achievable financial gains on its investments, and to satisfy the requirements of liquidity, safety/security and yield in order to ensure profitability. In pooling the investible funds from the GFIs and channeling them to diversified financial assets and development projects, the MIC's activities shall contribute to a prudent and transparent management of the government resources.' The objectives are all motherhood, the main driver will be to answer the question: How?As always, the devil is in the details. What are the 'big-ticket infrastructure projects, high-return green and blue projects, and country development, including agriculture?' Where are these located? What are the priorities? Again, have we not learned from the lessons of the National Development Corp.? Are we just gullible as a nation?What are we trying to do? Create fiscal space, increase investments in development projects while offering improved risk-reward trade-offs or create a new government with full control of investible funds? If we are after a one-fund concept on infrastructure, then Congress should pass an infra bill so that 'pork barrel' funding can be also placed in a pool of priority projects that are part of the approved infra plan. We cut on waste, and we limit politics from entering the pool of funds. Now, that is intergenerational!Lastly, the MIF appears to tie the hands of the next generation. Is that the intent? Will the problem that the Marcos economic team is trying to solve involve well beyond its term? To cover 12 or 18 years? The measure is silent and without the sunset provision, it appears that for so long as there are returns, the MIF will remain.With Maharlika, a new corporation takes over the use of a taxpayer's fund endowed with governmental powers that impacts on use of funds of GFIs, GAAs, FDIs (foreign direct investments) and others. With the track record of the public sector, setting up a bureaucracy such as the MIC will take a year or two before even setting up the protocols and dealing with all the turf issues that come with it. By midterm of this current administration and with the laser attention focused on MIC, we will not achieve the 8-point socioeconomic agenda because all eyes will be on where the money is. And with the attendant delays, focus on what really matters (to read, food inflation) and others will be conveniently set aside.Do not look to taxpayers in case of bailouts and behest loans. We have gone there before. The problem today is food inflation, all connected to supply and demand, and the value chain and to smuggling and middlemen control. Another problem is on electricity rates and amending or abolishing Epira (Electric Power Industry Reform Act) seems to be avoided more and more. Still another is in extracting resources that will make us self-sufficient as a nation when it comes to energy mix.If a leader needs to make tough decisions, do it first for those in the lowest tier of society. Ensure affordable food supply, adequate and stable electricity that is not the most expensive in the region, help the SMEs (small and medium enterprises) who want to do a reboot and rebound. Tough leaders stay for the long haul in problem solving. Others look for the easiest route out of a quagmire, believing everything is rosy because one just looks at the investment side.
