Idled

All those conceptual flaws ought to have been evident from the start. An investment fund is a good idea only if government incurs windfall revenues, most usually from the exploitation of natural resources. The Norwegian sovereign fund uses windfall revenues from that country’s North Sea oil revenues. So do the equivalent funds of Middle Eastern oil producers.

All the frailties of the MIF concept notwithstanding, the supermajorities of the administration in both chambers of Congress steamrollered the concept into law. There was hardly any consultation. Opposition to the MIF from among the economics and business communities was nearly universal. Now we reap the grapes of wrath. The LBP obediently turned in its P50-billion “contribution.” The DBP turned in P25 billion. We are not sure what the BSP has done so far.

Should the LBP and DBP fail to get exemption from the minimum capital requirement, both should stop lending money. All the medium and small enterprises who depend on financing from the government banks will suffer because of this. The entire economy slows down when the government banks stop financing. Not far in the future but today.

What happens now to the P75 billion “contributed” by the LBP/DBP? In banking, time is a cost. The funds are idled while government figures out a way to operate the MIF. No institutional investor has jumped into this fund to help create enough magnitude to make it viable. We pay taxes with the understanding that the government can efficiently manage the funds for the proper delivery of services to the people.

Two days before the start of the official campaign period for the barangay and Sangguniang Kabataan elections, a candidate for village council member or kagawad was gunned down in the town of Bucay in Abra. Catalino...

Source: News Formal (newsformal.com)

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