Maharlika – the ego trip is back was also published by The Manila Times on 7 June 2023.
It’s been a while since I heard the word “Maharlika.”
Back in the day, when Ferdinand Marcos Sr, father of Bongbong Marcos, the incumbent president, was rocking as a one-man, three-persona (executive, legislative, and judiciary) rule, I often heard Maharlika in a song.
There was also an assortment of landmarks and entities (such as government media outlet, a highway, and a reception hall in Malacañang), that went by the name of Maharlika.
Noise was further generated when then Senator Eddie Ilarde filed a bill in 1978 that sought to rename the Philippines to Maharlika. Marcos Sr. reportedly supported the bill, believing that Maharlika, as derived from a Sanskrit word “maharddhika”, stood for nobility. Pundits brought out another Sanskrit word “mahalingga” (which means “big penis”) from which the word Maharlika originated, and the brand by which Marcos Sr. designed his vision of a “New Society” to be labelled appeared spent.
In the end Maharlika did not progress because, as Nathan Quimpo noted in a paper, people saw it as the dictator´s “ego trip.” Rumors had it that Marcos Sr. "used Maharlika as his personal nom de guerre, depicting himself as the most bemedaled anti-Japanese Filipino guerrilla soldier during World War II. In the years before the martial law period in the Philippines, [he] commissioned a film entitled Maharlika to be based on his “war exploits.”
But as more information became available, the war hero storyline turned out to be rubbish. The 1986 research by Alfred W. McCoy, for example, showed that most of his medals were fake. As regards the movie, then First Lady Imelda Marcos banned it when an audio tape of her husband assumably having sex with Dovie Beams, one of the film's leading actresses, circulated in media.
It would take four decades later for Maharlika to re-appear, courtesy of a sneaky congressional punch, riding on the label of Maharlika Investment Fund (MIF).
In a buzzer-beating bow to the king, both houses of Congress adopted Senate Bill 2020 (oto-oto if read backwards), creating the MIF. The Philippine Senate approved the bill minutes before it closed the first regular session of the 19th Congress last Wednesday, 31 May 2023, or barely a week after Bongbong had certified it as urgent.
The MIF floored me. For starters, it did not bother to define what the word Maharlika means, or who it represents. Its proponents probably assumed Filipinos have a common understanding of it, which is untrue. That assumption risks the recall of a path to economic ruin paved by the Maharlika years of martial law. Lest anyone forget, it was a time when the financial system faltered due to corruption, exemplified among other things by the 1981 Dewey Dee caper, that triggered a massive bank run.
But it will take more than rebranding to excite the public when SB oto-oto does become a law. Beyond the symbols, people will need to see through what lurks behind the details. The MIF proposes to promote socio-economic development by making strategic and profitable investments in key sectors. I take it to mean that whenever there is “sukli” from profits, MIF will turn around to invest that surplus in socio-economic development projects, which do not normally yield financial returns.
While money is fungible, MIF may not use its funds all at the same time for both objectives. Social viability ratios (social internal rates of return) are different from financial viability measures. They require distinct sets of analytical rigors. In other words, profit must be generated first before social delivery projects can be subsidized.
The problem here is that government is not built for commerce. It is notorious for sinking enterprises to bankruptcy. Profit-making is best left to the private sector. With MIF, government risks not only compromising competition, but can also crowd out the private sector in promoting profitable ventures.
A profit-driven focus can also force the fund to invest in companies that dodge environmental or tax laws to cut their operating costs, or to underwrite behest or DOSRI loans, or to fund mergers and acquisitions that hurt, rather than benefit, the public. It cannot invest in private sector bonds, or this leaves poor optics for the government’s own securities. And when MIF invests in Treasury or Central Bank bonds, we have a case where taxpayer’s money is trying to make money from taxpayer’s money.
Although hypothetical, a question must be asked if MIF is worth the trouble it can create. Government corporations exist whose mandates share commonalities with those of the proposed fund. They include the Philippine National Construction Corporation (infrastructure), National Development Company (investing in diverse industries), and even the Energy Development Corporation. Why not pool these resources together instead of putting up a new one?
Progressive groups stage protests against the Maharlika Investment Fund. Photo by ABS-CBN.com
A cloud of asterisks hovers at the horizon for whatever future the MIF might have. The general opacity blighting its promise of being able to harmonize the twin financial and development goals will continue to hound a government that has yet to make the taxpayers proud. No amount of safeguards can placate a doubting public in a world where corruption remains unchecked. The Philippines ranked 105th among 196 countries/ jurisdiction in the 2022 Global Corruption Index, and number 116 among 180 countries in the 2022 Transparency International-Corruption Perception Index.
There is a provision in the proposed law that prohibits acts detrimental to would-be whistleblowers (such as interfering with their lawful employment or livelihood). If they have evidence, why not reward them on the spot? A bill providing for protection and benefits for whistleblowers is gathering dust in Congress. The legislators could have passed this first before any law like MIF that tempts corruption.
(The proposed whistleblower law, in my view, is deficient. It offers financial benefits “equivalent to at least ten percent (10%) of the amount which may be recovered as a result of the disclosure or the amount of one million pesos (P1,000,000.00), whichever is lower.” Why not make it 100 percent? The money to be recovered is considered lost anyway.)
Given the government’s dismal record in business ventures, the haste by which Congress passed the MIF once more shows how politicians have taken too many liberties with the spending of people’s money.
And yet, in fairness to them, our voters have elected them to office with a mandate to spend taxpayers’ money in any way they deem prudent and beneficial for their constituents. However, the limit up to which point that power to appropriate can be devolved to the administrators of the MIF, who are political appointees, is unclear. The task of these administrators is to invest; and because all investments assume risks, they can in the future leave the taxpayers empty-handed without necessarily committing any illegal act.
When that happens, we can look back at a bootlicking Congress that once relived the encore of an ego trip and regurgitated the path to a development myth.