The Long View: The Maharlika mystery



The Maharlika mystery

By: Manuel L. Quezon III – @inquirerdotnet

Philippine Daily Inquirer / 05:03 AM October 25, 2023

The President wanted it, the President got it, and then the President suspended it: now people wonder what gives when it comes to the Maharlika Investment Fund. Viswa Nathan, writing in The Asia Sentinel (the last of the fiercely independent Southeast Asian papers) puts forward two possibilities. The first, courtesy of economist JC Punongbayan, is that the President wants to put Benjamin Diokno in charge of the fund, but it would require his giving up the finance portfolio and necessitate a Cabinet revamp in turn. The second, courtesy of an unnamed source, is that the President has emerged from the cloud of sycophancy that normally surrounds all presidents and has discovered that the Philippines is not an investment darling of global finance.

Strangely missing was the possibility bandied about earliest and which happens to be simplest: the President suspended implementation upon being tipped off the Supreme Court was poised to impose a TRO based on one of the cases filed to oppose the scheme. This reason has the benefit not only of simplicity but also clarity: It reminds us of one institution not totally in the President’s control: the judiciary.

The theory is that in speedily remitting their share of the Maharlika scheme’s funding, the Land Bank of the Philippines and the Development Bank of the Philippines did so without the necessary clearance from the Bangko Sentral ng Pilipinas. Viswa Nathan for his part says the real problem is one of perception, specifically, crime, pointing to the recent murder of a New Zealand citizen, and the laggard status of the country which has attracted roughly a third to half of what our neighbors have been attracting in terms of foreign direct investments.

He puts forward an intriguing possibility: that there is money aplenty for investments if only the President can tap the increasing wealth of the already very rich in the Philippines. “But the president has a thorny problem to consider,” he writes: “He carries the baggage of his own deeply corrupt ancestors.” One might suppose that nervous plutocrats would be looking more to the fate of firms like Unilab, the LT Group, Inc., or the GMA Network for more specific signs of ancestrally inspired interest (of which there seems little to none, so far). At the very least, the power of the presidency is such that if the President were to invite Filipino moguldom to invest in the scheme, no one would be able to say no — and would make at least token investments.

An apocryphal tale from the bad old days of the 1980s comes to mind instead. The story is that, as the economy tanked, then Prime Minister Cesar Virata convinced the then president to convince his closest friends to repatriate a few hundred million dollars of their own money to help prop up the government’s financial prospects. This story perhaps inspired the very early rumor (dating to the day after the election results were known) that the incoming administration would propose a sovereign wealth fund as an instrument to discreetly repatriate funds. It would certainly address a criticism readers of Conrado de Quiros would remember well. He always liked to point out that one problem with Filipino ill-gotten wealth was that it was unpatriotic. It was stashed away abroad, while that of our neighbors was reinvested in their own economy (his favorite example of this were the Suhartos of Indonesia).

We saw recently the relative finesse with which the Marcos-Romualdez tandem took away the confidential funds that are the bedrock of Duterte-style political operations (they gladly seconded the Duterte motion to ask for millions, joined in the chorus of shock when radicals denounced it, nodded in agreement when it was pointed out the money was best used by security agencies, and complimented the Dutertes on their nobility and patriotism in letting it be taken away). They have proven far more accommodating—and far more elastic—toward the post-Edsa system than the Dutertes. So much so that Vergel Santos has become alarmed at the rapidly emerging prospect of a consensus emerging that the Marcos-Romualdez combination is more predictable, responsible, businesslike, and accommodating than their coalition partners can ever be.

Manuel L. Quezon III.

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