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Bilyonaryo - Business

Nat’l scientist Raul Fabella on Maharlika Fund: Few will benefit from gains but losses will be ‘charged to the nation’

  • December 11, 2022
  • Bilyonaryo.com

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.

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Usapang Bilyonaryo by Ces Drilon

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“Usapang Bilyonaryo” is a digital-first, hybrid magazine show hosted and produced by veteran broadcast journalist Ces Oreña-Drilon in cooperation with the Bilyonaryo.com team. The 30-minute TV cut airs on CNN Philippines at 8 PM every Monday, starting January 16. The full version or producer’s cut of each episode, as well as interview splices, will be posted on Bilyonaryo.com’s Youtube and Facebook accounts.

 

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