Malacanang claims that Junior, together with his economic advisers and seven top taipans of Philippine business, promoted the Maharlika Fund in Davos. We shouldn’t hold our breath that they convinced anyone.
Indeed, the question potential foreign investors and fund managers should have asked the taipans is whether they truly believe in the fund to put their own funds in it. No, not the investible funds of their companies because that’s not fair to ordinary stockholders. I am thinking of their own personal funds.
That would have determined in a couple of minutes who among the taipans are just there to brown nose Junior. The blue-chip names were included in Junior’s Davos expedition for some level of legitimacy… that the junket was supposed to win investors for the controversial Maharlika fund. The taipans were needed for props. Ben Diokno and the economic managers were not credible enough.
So, Sabin Aboitiz, Kevin Tan (Megaworld), JAZA (Ayala), Lance Gokongwei, Ramon Ang (San Miguel), Teresita Sy Coson (SM) and Enrique Razon (ICTSI) would have had enough credibility to convince potential investors if they said they were ready to invest themselves.
Back in Manila, Rep. Joey Salceda was telling everyone that he had been asked to help clean up the Maharlika bill passed by Congress. Among others, the DBP and the BSP are no longer fund sources.
“I don’t know whether I should be revealing this, but right after Christmas, we were commissioned – me and three others – to rewrite or essentially re-engineer the MIF,” he said in a television interview.
Salceda said they decided to limit the fund sources to dividends from government-owned and controlled corporations (GOCCs) only. The fund will later go public through an initial public offering (IPO), after which GOCCs would no longer be tapped as capital sources.
“This will also make MIF a private-sector driven fund rather than one where the government’s exposure is greater. No sovereign guarantees or BSP regulatory reliefs needed, nor are any exemptions from GOCC governance and taxation necessary. There is greater room for private sector participation due to the initial public offering and the private sector majority ownership,” he said.
That opens the doors for the taipans to make personal investments in Maharlika if Joey is right. However, Sen. Mark Villar filed the same bill passed by the House.
There has been demands for a wealth tax after Oxfam revealed that the nine richest dollar billionaires in the Philippines have more wealth than half of the entire country’s population – or 55 million Filipinos. Maybe, the personal investments of the taipans in Maharlika could take the place of the proposed wealth tax.
What’s not to like? The investment will still be in the taipan’s name, but it will be used for development projects that can spread wealth more equitably. Not a bad deal.
Inequality experienced in the Philippines is stark, Oxfam Pilipinas executive director Erika Geronimo said, citing data from Oxfam and the Forbes’ billionaires list.
Here are the names in the Forbes’ richest list in 2022: Sy siblings (net worth: $12.6 billion); Manuel Villar (net worth: $7.8 billion); Enrique Razon Jr (net worth: $5.6 billion); Lance Gokongwei and siblings (net worth: $3.1 billion); Aboitiz family (net worth: $2.9 billion); Isidro Consunji and siblings (net worth: $2.9 billion); Tony Tan Caktiong and family (net worth: $2.6 billion); Jaime Zobel de Ayala and family (net worth: $2.55 billion); and Ramon Ang (net worth: $2.45 billion).
Then there are others in the list to round it off to the top 15: Andrew Tan, ($2.4 billion); Lucio Tan ($2 billion); Ty siblings ($1.9 billion); Dennis Anthony and Maria Grace Uy of Converge ICT Solutions ($1.75 billion); Lucio and Susan Co ($1.7 billion); Hartono Kweefanus & family of Monde Nissin, a food manufacturer based in the Philippines known for its instant noodles and snacks ($1.5 billion).
Junior should ask the 50 richest in the Philippines (including some foreigners) to invest at least P1 billion each, and that should get the Maharlika Investment Fund going. Appeal to the sense of patriotism of these rich folks, reminding them they have lived off the fat of the land for so long and continue to do so. The elite can kickstart a Maharlika IPO without bothering the pension funds, the BSP, and DBP.
Junior should ask them to put money in Maharlika or he will support a wealth tax. The growing demand for a wealth tax can be quieted down once Maharlika starts investing in much needed infrastructure, and even agriculture, that will help share the country’s wealth with the rest of the madlang pipol.
…And make the first investment a buyout of the Chinese state corporation that controls 40 percent of NGCP, a national security risk. NGCP is a risk-free money maker and that money should remain onshore.
Let the Maharlika law exempt a Maharlika investment from agrarian reform, if it modernizes agriculture, to include consolidation of farms to benefit from economies of scale. The program should include marketing and logistics to scuttle those heartless traders for good.
A broader base of investors and not just government corporations will give Maharlika some credibility, provided the professional fund managers will not be bullied by politicos.
One thing is sure… our country’s high level of social inequality is unsustainable. I was talking with someone of the elite last week and he thinks Pinoys will forever suffer patiently.
The guy from the Spanish old rich is probably right. But if I were him, I wouldn’t bank on it.
Actually, rich Pinoys have Plan Bs in terms of second countries to flee to if things get too hot here. But for so long as they regard the ordinary Pinoy as docile, they could be caught off guard.
Good to remember we are all Filipinos and we all have an obligation to make sure no one lives in squalor or experiences hunger. Last year, SWS reported that three million families experienced hunger. At an assumed five persons per family, that’s 15 million people going hungry. Maharlika projects should address hunger among other social concerns not sexy enough for ordinary business.
Wealth tax or Maharlika investment. There is now a choice.
Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco
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