National scam in the making? | #NeverForget Diary
Week 23: November 28-December 4, 2022
This is the #NeverForget Diary, a weekly summary of what’s happening in the Philippines under Marcos II. In a time of mangled histories and fragile memories, it’s crucial never to forget. (Note: this post may be clipped in your email inbox. Photo above from the Department of Agriculture website.)
A new bill filed by President Ferdinand Marcos Jr.’s son and cousin seeks to create a new sovereign wealth fund called the “Maharlika Investments Fund.”
Maharlika is a nod to guerrila group that Marcos Sr. supposedly belong to during WWII. But this myth has been debunked by historians.
The Maharlika Investments Fund will be initially sourced from the social insurance programs of GSIS and SSS (pitching in a combined P175 billion), and also gov’t banks such as Landbank and DBP, and even the Treasury. The total seed fund will be P275 billion.
But is it even legal to dip into the country’s pension funds?
This would be somewhat more sensible if GSIS and SSS have surplus funds. But in fact GSIS and SSS are incurring huge deficits at the moment:
Finance Secretary Ben Diokno is supporting the bill, saying the idea for this arose in the Duterte administration. He also said some of the country’s gross international reserves will be “mobilized” for the Fund, apart from OFW remittances and BPO earnings care of the BSP. But what does that mean exactly? The BSP doesn’t own remittances or BPO earnings.
By the way, another economist, Marikina Rep. Stella Quimbo, is co-authoring the bill, lending it some credibility. But many other economists are against the bill.
Governance issues will likely hound the Fund. For instance, in the latest version of the bill, the president will be made chairman of the board of the Maharlika Fund. That’s worrisome given the history of the Marcoses with state funds.
My friend Enrico Villanueva, a seasoned banker and now a senior lecturer at UP Los Baños College of Economics and Management, had these to say:
The Fund is a real threat to pension funds of GSIS and SSS, as well as the development loans that can be issued by the Landbank and DBP.
Other analysts have spoken out against this:
Men Sta. Ana of the Action for Economic Reforms said:
Whatever lofty intention the bill has can be done under existing institutions and mechanisms. What government must do improve is development spending by making the current budget less wasteful and less discretionary and more efficient and productive. Similarly, government can enhance the fiscal space by increasing revenues through a combination of new taxes that are efficient policy and tax administration.
Thus, scrap the bill.
No less than BSP Governor Philip Medalla is against it, aware of the threat to BSP’s independence.
Here’s my take on the matter, in my tweets and weekly Rappler column:
Petitions have already cropped up against this potential scam:
Rather than fund the Maharlika Fund using pensions and taxes, why not go after the Marcoses’ unpaid estate taxes and ill-gotten wealth?
Fitting comics:
In a twist (or is this for show?), Senator Imee Marcos is against the Maharlika Fund.
Even some trolls think it’s a scam:
Congressman Joey Salceda assures there are enough safeguards. But the ghost of 1MDB is just too difficult to ignore.
Salceda also said the plight of SSS funds wasn’t taken into consideration. What?
Speaking of scams, a businessman lost P5 million after being duped into a Marcos gold investment.
Speaking of Filipinos having to pick up the pieces of the Marcoses’ mess…
CHRISTMAS INFLATION
My friend Carl Javier, CEO of Pumapodcast, posted this photo showing that red onions are now at P400/kilo. Yikes.
Gov’t is cracking down on smugglers. But this is not the root cause of inflation. Smuggling is a sign of shortage. What is gov’t doing to boost local production?
Meanwhile, will shrinkflation will hit Noche Buena?
Filipino families all over are coping with their own diskarte (strategies):
Some holiday tips:
How much can P300 buy these days? Here’s a report of Barnaby Lo:
Some people claim that we should just be content with our lot and eat within our means. However that removes accountability from those in power who can actually do things to lower inflation.
Some trolls are saying inflation is not so bad. One mistook inflammation for inflation LOL.
The Bangko Sentral says inflation was likely within 7.4% to 8.2% in November. We might see another record high.
Amid record inflation, Marcos Jr. said “here we are, we have all been blessed.”
The fact is, Marcos Jr. isn’t doing enough against inflation, even if he’s not helpless.
Rather than take concrete steps, Marcos Jr. likes to rely on hope/luck/chance instead.
Despite the Marcos Jr. administration’s abysmal failure to rein in inflation, he remains popular according to a new survey. However, how reliable is this survey?
Elsewhere in the world, inflation is also painfully high. Central banks worldwide have raised their interest rates at the same time, increasing the chances of a global recession. In this sense, we’re living in an unprecedented time.
Unfortunately, the global rise of interest rates is making debt-ridden countries more vulnerable—especially those with lots of dollar-denominated debts.
Things are looking especially bad in Europe. The worst isn’t over there.
IRRI REENACTMENT
This week the president went to the International Rice Research Institute (IRRI) in Los Baños, Laguna. There he reenacted, along with IRRI officials and staff, the 1966 visit of his father at IRRI, where Marcos Sr. showed around visiting US President Lyndon Johnson.
The president insisted at IRRI that his promised P20/kilo of rice is “really the goal.”
But it’s an impossible dream.
PRESIDENTIAL KALAT
At the launching of Kadiwa ng Pasko in Quezon City, President Marcos Jr. mistakenly called Mayor Joy Belmonte as Joy “Beltran.” Right after, he wasn’t even sure if he was wrong.
Meanwhile, on November 30, the president wasn’t thoroughly briefed about protocols in the commemoration of Bonifacio Day. He held on to the rope and didn’t immediately put his hand on his chest when the National Anthem (Lupang Hinirang) played.
When he gave a speech, the president—who for decades has evaded paying taxes from his father’s estate—bade Filipinos to be “dutiful, law-abiding.”
At another event on December 2, the president lauded media for helping “spread the government’s message to the people.” But that is NOT the job of journalists.
It’s nearly the end of 2022, yet the president still hasn’t appointed a health and defense secretary. What’s taking so long?
Marcos Jr. will sign an EO on ease of doing business. But isn’t there an Ease of Doing Business Act already, signed by ex-president Duterte?
#NEVERFORGET
Prof Winnie Monsod endorses my 2021 paper on martial law economics, co-written with Prof. Noel de Dios and Prof. Corina Bautista.
One of the best reports of Rappler in 2022:
Meanwhile, the DILG and police will reportedly pursue a war on drugs focused on rehabilitation and reducing drug demand. But have people forgotten about the 6-year bloody drug war of Duterte that killed 30,000+?
We need to hold the Duterte administration accountable. We must never forget the drug war atrocities.
Speaking of the Duterte regime, Rappler CEO and Nobel Peace Prize laureate Maria Ressa is doing the rounds promoting her new book on Duterte’s authoritarian rule, How to Stand Up to a Dictator.
Maria even appeared on The Late Show with Stephen Colbert!
The fight against disinformation is threatened by Elon Musk’s takeover of Twitter. Recently, it took down its Covid fact-checks.
Freedom of expression in the Philippines was attached when some books were banned for being “subversive.” But the authors of those books are fighting back.
By the way, gaslighting is Merriam-Webster’s word of 2022. How fitting, given the tidal wave of disinformation we’re enduring.
MISCELLANY
VP Sara Duterte-Carpio is pushing for a “mandatory toothbrush drill” among schoolchildren as a way to promote a “National Culture for Peace” and also obedience to authority. What?
AI’s take on this issue:
Senator Risa Hontiveros is pushing hard against the confidential funds requested by VP Sara Duterte-Carpio for the DepEd.
Meanwhile, Senator Padilla deems as a “national threat” people who are looking for the president during calamities. Isn’t stupidity the national threat here?
Meanwhile, Senator Raffy Tulfo wants selective decriminalization of libel. What?
Some lawmakers are pushing to revive the bloated P10 billion budget of the NTF-ELCAC.
Evidently, students in General Santos City haven’t fully moved on from the pink wave of 2022:
Staggering wastage of vaccines:
Skyway, a tollway, is often in standstill. Here’s an illustration of the induced demand effect:
GLOBAL NEWS
Massive protests erupted across China. People are bravely protesting the draconian Covid lockdowns.
They were especially triggered by the deaths of 10 people trapped in an apartment fire in Urumqi City in far western China.
These are the largest protests in China since Tiananmen Square in 1989.
People are raising white sheets of paper as a sign of their protests.
This is not just about Covid, btw. Other Chinese are protesting against the Communist Party itself and its chokehold on people’s everyday lives.
In other news, India will be the most populous country in 2023, overtaking China.
Tuvalu will be uploading itself in the metaverse. A sign of the times, and a precautionary tale for countries like the Philippines most exposed to the effects of climate change.
Vietnam is now exporting electric vehicles to the US market. Meanwhile, in the Philippines, our main export is still assembled semiconductors.
GRAPHS/MAPS OF NOTE
Internet speeds across most the country continue to be crappy:
A nice schematic of the Luzon Railway Network:
Global fall of total fertility rates:
Marriage market returns of genital cutting in Africa:
How inequality has changed in the US under Biden’s administration:
A Musk effect on US lawmakers’ followings on Twitter:
Longest train journey possible:
RECOMMENDATIONS
Recommended book: Economics for the Common Good by Nobel laureate and economist Jean Tirole.
Recommended explainer: “How do we create a better economy?” narrated by “Doughnut Economics” proponent herself, Kate Raworth.
Recommended movie: Parasyte on Netflix. ⭐️⭐️⭐️⭐️⭐️ Once you start you won’t stop.
Recommended movie: Nocebo. ⭐️⭐️⭐️⭐️⭐️ Chai Fonacier is in her element and basically stole the show.
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