According to the 2021 Commission on Audit report, the Land Bank of the Philippines has the following key figures:
- Assets – P2.594 trillion (100 percent)
- Liabilities – P2.374 trillion (91.53 percent)
- Equity – P220 billion (8.47 percent)
If you invest P50 billion in the Maharlika Investment Fund (MIF), Landbank’s equity will decrease by P50 billion and the cash assets of Landbank will also be reduced by P50 billion. This is a cause for concern for military and uniformed personnel (MUP) as Landbank is the depository bank for their salaries and pensions.
The first person who should have objected to the MIF is Finance Secretary Benjamin Diokno, as no economist worth their salt would support it. However, he did not voice any objections.
Here are the reasons why the MIF should be scrapped:
- With a national debt of P13.91 trillion as of April 30, 2023, there is no available funds to invest in the MIF. A sovereign wealth fund is only feasible if the government has excess funds.
- The government financial institutions, such as Landbank, DBP, Social Security System, and Government Service Insurance System, have their own mandates and the government’s equity is only a small minority compared to their respective assets.
- These financial institutions have their own departments and experts who are responsible for investing their funds. Therefore, there is no need for the establishment of the MIF.
- If there are government projects that require funding, they can be financed by government financial institutions, local private banks, or international banks. Creating the MIF is unnecessary.
- The MIF bill allocates 2 percent of the total fund for the overhead of the proposed Maharlika Investment Corp. (MIC), which is a waste of money.
- The investment portfolio of MIC is highly speculative.
- Finance Secretary Diokno, who is set to become the chair of MIC, cannot be trusted.
Considering the aforementioned reasons and on behalf of the Filipino people who are suffering, it is urged to veto the MIF bill and to immediately remove Diokno as secretary of finance.
RET. Col. Hector Tarrazona
Financial and Management Consultant
AIM Scholar, AIM MDM 1991
PMA Class 1968
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