THE Supreme Court has been asked to rule on how the Maharlika Investment Fund was legislated, with petitioners claiming that the Maharlika bill was improperly certified as urgent and passed without the benefit of the required viability review for new government corporations.
The Bayan Muna party-list and Senator Aquilino Martin D. Pimentel III filed the 55-page petition on Sept. 18, alleging that the way Congressional approval was obtained “short-circuited” the process outlined in the Constitution.
“All told, the President committed grave abuse of discretion amounting to lack or excess of jurisdiction when he exercised his Presidential power of certification twice — in the House of Representatives in December 2022, and in the Senate in May 2023,” according to a copy of the petition.
The petitioners also argued that an urgent certification was not necessary after Senate President Juan Miguel F. Zubiri stated that the effects of the sovereign wealth fund would only be felt in about five years’ time.
In May, opposition legislators from the Makabayan bloc asked the High Court to reconsider its denial of their petition seeking to void the urgent certification of the proposed Maharlika Investment Fund, as well as of the subsequent approval of the bill in the House of Representatives.
The plaintiffs noted that the investment fund did not undergo a test of economic viability for proposed government corporations to ensure that government does not “haphazardly relinquish its governmental functions without basis.”
The Constitution requires a viability test before a government-owned or -controlled corporation can be set up.
“Although it is true that the Business Proposal of the Maharlika Investment Corp. reflected promising estimated returns for the next 10 years, the computation on which the estimated returns were based was not even provided in order for Congress, and also the public, to study and review such basis,” they said.
President Ferdinand R. Marcos, Jr. signed the measure into law on July 18. He had certified the bill creating the Maharlika Investment Fund as urgent on May 22.
The Senate approved the bill creating the sovereign wealth fund on May 31, while the House of Representatives had approved the measure in December, two weeks after the bill was filed.
Mr. Marcos said in his certification letter that the immediate passage of the bill creating the Maharlika fund is needed “in order to establish a sustainable national investment fund as a strategic mechanism for strengthening the investment activities of top performing government financial institutions (GFIs), and thus pump-prime economic growth and social development.”
The Maharlika Investment Corp., which will manage the fund, has an initial allotment of P125 billion in capital from the National Government, the Land Bank of the Philippines and the Development Bank of the Philippines.
Earlier this month, the Department of Finance said the sovereign wealth fund is expected to generate 100,000 direct and indirect jobs as its initial capitalization becomes fully paid in over the first 10 years of operations.
“While petitioners do not contest the power of the State to create such agencies, instrumentalities, or corporate bodies when needed, such power is not without limitations,” Bayan Muna and Mr. Pimentel said.
“The test of economic viability is among the limitations imposed by the Constitution to ensure the government does not relinquish governmental functions… especially if it depletes public funds wantonly nor arbitrarily intrude on the private sphere.” — John Victor D. Ordoñez