National Scientist for Economics Raul Fabella has joined growing calls to reject the controversial Maharlika Wealth Fund (MWF), saying the investment plan is premised on totally wrong assumptions and promises.
“The Maharlika Wealth Fund gets it very wrong by contriving that the main Philippine infrastructure problem is financing and becoming once more a market player in the risk-return space,” Fabella wrote, saying that this wrong world view will drive future Maharlika fund managers into making the wrong calls at the cost of state funds.
“History tells us that such arrangements lead to irresponsible risk taking, bankruptcy and financial crises,” he added.
Fabella said only fund managers stand to gain from any windfall from the MWF once it is created.
“Positive returns for Maharlika placements will mean hefty private returns (bonuses) for these select group; but negative returns will be socialized, that is, charged to the nation,” he said.
“The current problem in 2022 and now is that our debt load is dangerously tending toward a payments crisis; the economy has to outgrow the debt to push back on the payments crisis,” Fabella added.
A professor emeritus at the University of the Philippines School of Economics, Fabella said it is a “gambler’s double down folly” for backers of MWF to claim that it will help ease the country’s fiscal woes.
“Wiser is the counsel outside the bingo hall: bet only the money you do not need! That is the philosophy of prudent SWF,” he said.