By Beatriz Marie D. Cruz
A PROPOSED sovereign wealth fund that Philippine President Ferdinand R. Marcos, Jr. pitched to world and business leaders in Davos, Switzerland this month risks getting voided by the courts for “sequestering” dividends from state companies, a congressman said on Tuesday.
The so-called Maharlika Investment Fund bill, which the House of Representatives hastily approved last month, forces government-owned companies to finance it at the expense of basic social services such as health, education, food and job security, Albay Rep. Edcel C. Lagman said in a Viber message.
This is against the charters of these government-owned and -controlled corporations, he said. “Unless the Dividend Law of 1993 is amended or repealed, the 50% of the annual net income of government-owned and -controlled corporations (GOCC) cannot be used as seed money for the fund.”
Michael Henry LI. Yusingo, a lawyer and policy analyst, said the bill “would definitely be questioned before the Supreme Court.” “Hence, lawmakers allied to the president should not railroad the process,” he said in a Facebook Messenger chat.
Mr. Lagman said dividends from state companies could not be securitized to fund the sovereign wealth fund because 50% of these are allotted to their operations and the yearly General Appropriations Act.
Jose Ma. Clemente S. Salceda, the main proponent of the bill who is also from Albay, did not immediately reply to a Viber message seeking comment.
President Ferdinand R. Marcos, Jr. last week pitched the still unapproved sovereign wealth fund measure to top business and world leaders at the World Economic Forum (WEF) in Davos, saying it would help diversify the country’s financial portfolio.
The House approved the bill on final reading on Dec. 15.
Under the Dividend Law, state companies must remit at least 50% of their yearly net earnings as cash, stock or property dividends to the National Government. The other half is kept to fund their operations.
Mr. Salceda has said GOCC dividends are considered surplus.
Mr. Lagman disagreed.
“There is no surplus because the remaining 50% is earmarked for the GOCCs’ operational and programmed activities,” he said. “A surplus only occurs when what remains of earnings or revenues are free or not encumbered for disposition as all remittance and expenditure requirements are met.”
Mr. Yusingo said both the House and Senate should “subject any bills on this matter to thorough deliberations.” “Railroading the process will only increase the probability of the law being brought to the Supreme Court.”
In a letter to Speaker Ferdinand Martin G. Romualdez on Monday, Mr. Lagman said: “There is a need to recall the approval of House Bill No. 6608 because the reengineered version was not deliberated on by the House and it is not part of the bill approved on third reading on Dec. 15.”