Independent central monetary authority

TOPIC: THE "INDEPENDENT CENTRAL MONETARY AUTHORITY" VIS-A-VIS THE PROPOSED MAHARLIKA INVESTMENT FUND ACT (MAHARLIKA SOVEREIGN WEALTH FUND, MAHARLIKA INVESTMENT CORPORATION). -

Under Section 20 of Article XII, "National Economy and Patrimony", of the 1987 Constitution, "Congress shall establish an "INDEPENDENT CENTRAL MONETARY AUTHORITY".

That "INDEPENDENT central monetary authority" is the BANGKO SENTRAL NG PILIPINAS (BSP).

The BSP (formerly called the "Central Bank of the Philippines") was created by R.A. No. 7653, c. 1993, entitled "The Central Bank Act". R. A. No. 7653 was later amended in 2018 by R. A. No. 11211 to strengthen the regulatory powers of the BSP as the "INDEPENDENT central monetary authority" mentioned in the 1987 Constitution.

The central monetary authority (BSP) "shall provide POLICY DIRECTION in the areas of MONEY, BANKING, AND CREDIT". It shall have "SUPERVISION over the operations of BANKS and exercise such REGULATORY POWERS as may be provided by LAW OVER THE OPERATIONS OF FINANCE COMPANIES AND OTHER INSTITUTIONS PERFORMING SIMILAR FUNCTIONS". (Section 20, Article XII, 1987 Constitution).

FURTHER, under Section 21 of Article XII of the 1987 Constitution, "FOREIGN LOANS may only be incurred in accordance with LAW and the REGULATION OF THE MONETARY AUTHORITY".

FURTHERMORE, under Section 20 of Article VII, "Executive Department", of the 1987 Constitution, "the PRESIDENT may CONTRACT OR GUARANTEE FOREIGN LOANS on behalf of the Republic of the Philippines with the PRIOR CONCURRENCE OF THE MONETARY BOARD, and subject to such LIMITATIONS as may be provided by LAW".

FINALLY, the MONETARY BOARD is mandated by the 1987 Constitution to regularly submit to Congress a COMPLETE REPORT of its decisions on APPLICATIONS FOR FOREIGN LOANS "CONTRACTED OR GUARANTEED BY THE GOVERNMENT OR GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS which would have the EFFECT OF INCREASING THE FOREIGN DEBT".

The statements issued yesterday by the leaders of the Lower House of the Philippine Congress revealed that the "SURPLUS PROFITS OF THE BANGKO SENTRAL NG PILIPINAS" would be used to fund the start-up capital or equity of the proposed Maharlika Investment Fund (Maharlika Investment Corporation).

I humbly submit that if the Bangko Sentral ng Pilipinas would stand as the SOLE OR MAIN OR MAJOR EQUITY/CAPITAL CONTRIBUTOR of the proposed Maharlika Investment Fund (Maharlika Investment Corporation), SUCH A FINANCIAL ARRANGEMENT WOULD BE UNCONSTITUTIONAL.

How can the Bangko Sentral ng Pilipinas be expected to INDEPENDENTLY, HONESTLY AND COMPETENTLY SUPERVISE AND EXAMINE THE OPERATIONS of the proposed Maharlika Investment Fund (Maharlika Investment Corporation) when it is the sole or main or major equity owner, capital contributor or shareholder of the proposed financial institution?

Moreover, how can the Bangko Sentral ng Pilipinas be expected to INDEPENDENTLY, FAIRLY AND REASONABLY PROVIDE "POLICY DIRECTION IN THE AREAS OF MONEY, BANKING, AND CREDIT" when it is a MAJOR PLAYER IN THE PRIVATE CAPITAL MARKET as the sole or main or major equity owner, capital contributor or shareholder of the proposed Maharlika Investment Fund (Maharlika Investment Corporation)?

The CONFLICT OF INTEREST will weaken, if not destroy, the fundamental constitutional principles of TRANSPARENCY, ACCOUNTABILITY, GOOD GOVERNANCE AND CHECK AND BALANCE that guide the equitable and Inclusive socio-economic development of a genuine democratic republic.

The aforementioned scenario will produce a fertile ground conducive to UNCHECKED MASSIVE GOVERNMENT CORRUPTION.

An UNCONSTITUTIONAL LEGISLATIVE ACT is VOID AB INITIO for being violative of the spirit, intent and express language of the Constitution.

"PUBLIC OFFICE IS A PUBLIC TRUST. Public officers and employees must, at all times, BE ACCOUNTABLE TO THE PEOPLE , SERVE THEM with UTMOST RESPONSIBILITY, INTEGRITY, LOYALTY, and EFFICIENCY; ACT WITH PATRIOTISM AND JUSTICE, and LEAD MODEST LIVES." (Section 1, "Accountability of Public Officers", Article XI, 1987 Constitution).

Please note that the incumbent BSP Governor FELIPE M. MEDALLA a few days ago expressed the same sentiment as stated above (although he meekly added that he would abide by the final decision of Congress on the matter).