SENATOR Francis Joseph “Chiz” G. Escudero is urging proponents of the Maharlika Investment Fund (MIF) to comply with the Constitution of the Republic of the Philippines. That constitutional requirement, according to the lawmaker, is to provide a solid report complying with the test of economic viability before creating a new government corporation, such as the Maharlika Investment Corp. being formed by the impending law.
“That is a document proving that the contemplated state corporation will make money,” as a way of protecting the funds to be invested in it, Escudero explained during a radio interview last Sunday.
The lawmaker said the basis for that test as required in the 1987 Constitution was the findings by the Charter framers that “so many GOCCs had been run to the ground and taxpayers ended up shouldering their liabilities.”
In particular, he cited the observation of then Commissioner Blas F. Ople (of the 1987 Constitutional Commission) that the government budget in 1986 was P117 billion. The debt of GOCCs reached as much as P26 to P27 billion at that time.
According to Escudero, that amount is roughly 20 percent of the budget of the entire government. So, he said, “we should be cautious in creating new GOCCs…that was the basis of the constitutional requirement.”
Hence, he added, they inserted that requirement for a test of economic viability, which must be submitted to Congress, which shall then study it well before giving its nod to the creation of a new state corporation.
“As I see it, the business proposal that was submitted to Congress [during hearings on the MIF] does not respond to this requirement.”
During interpellations of the MIF’s main sponsor Sen. Mark A. Villar, Escudero had stressed that the 3-page document submitted to the Senate by the Bureau of Treasury—not even the National Economic and Development Authority, he pointed out—had provided very flimsy justifications for the MIF and did not detail well the basis for saying it could provide a good return on investment.
Escudero conceded, though, that the Constitutional Commission was not too clear on the definition of economic viability, or whether the report required partook of a feasibility study.
A legal challenge to the MIF in the Supreme Court could, he added, provide the courts a venue for clarifying this, among others.