TRANSCRIPT OF INTERPELLATION
Senator Risa Hontiveros on Confidential and Intelligence Fund, and Maharlika Investment Fund during the plenary debates of the 2024 General Appropriations Bill
November 08, 2023

Senator Risa Hontiveros (SRH): First on the withdrawal of the P75 billion LandBank and DBP Capital.

The good sponsor himself introduced a provision in the Maharlika Bill stating that the contributions of LBP and DBP to the equity and to the projects of the Maharlika Corporation should not exceed 25 percent of the net worth of these banks. Do we know if we might need to infuse equity into DBP and LandBank because of the possibility that this 25 percent limitation might already have been breached when DBP and LandBank wrote P75 billion worth of checks for the Maharlika Corporation?

Senator Sonny Angara (SAA): I'm told the answer is no because the contribution in percentage terms of the two terms is 3 and 4 percent, respectively, still far from the 25% threshold that we... thank you for reminding us about that.

SRH: Yes, nasa batas mismo. Thank you, Mr. Chair, of course you're very welcome so the answer is we need not to infuse equity because allegedly, we are way below the 25% limit. We would like to impose the burden of proof not on the Sponsor but on the DoF, the Land Bank and the DBP. Could we ask LBP, DBP and the DoF Secretary to submit a report demonstrating their compliance with this 25 percent limitation, even after they have conveyed their P75 billion equity to the Maharlika Corporation?

SSA: They will do that.

SRH: Thank you. I wonder, Mr Chair, ang batas po ba at yung IRRs noon pinapayagan ba yung infusion nitong total na P75 billion papasok sa Maharlika Corporation na gawin on an installment basis para halimbawa ang Kongreso hindi kailangang mag-infuse ng capital talaga sa LBP and DBP sa 2024 at para talaga yung 25 % rule hindi malalabag which we will assess based on the report at para yung mga impirtanteng kliyente ng Landbank at DBP ay maseserve talaga?

SSA: The P75 billion is the initial funding so according to treasurer Lea, now with the monetary board, that the law provides that must be provided immediately

SRH: So hindi, therefore, hindi po siya pwedeng iinfuse on installment basis.

SSA: I've been told it's not possible because the law is clear.

SRH: So and since it is not possible at ito ang premise ko kasi dito sa susunod na tanong ay baka pag nakita nabasa namin yung report eh mapapatunayan yung pangamba ng ibang observers na nabreach na yung 25% limit na iyon then equity might need to be infused to landbank and DBP sya to the total tune of 75 billion pesos at mangangailangan tayo ng source or sources of the equity infusion.

Ngayon ung tanong ko about Maharlika finance via DBP and LBP kaugnay ng private sector investing. Dahil if it indeed the case as reported in the news, na yung P50 billion from Land Bank at P25 billion from the Development Bank of the Philippines will be charged against the capital of these two banks -- then is it correct to say that the consequence of the transfer P75 billion in DBP and LBP capital is a reduction of about P600 billion in the ability to lend of these two banks -- gaya ng unang babala ng credit-rating firm Fitch, at pati ng the investment banker Steven Cuunjieng?

SSA: During the deliberations, I was reminded by former treasurer Lea, Landbank said that they had 1.3 trillion in investible funds and DBP had 850 billion in investible funds. I think the 75 billion that the law requires of them is on the prudent side, your honor.

SRH: Nothing to worry about the warnings of Fitch and Cuunjueng?

SSA: None, your honor.

SRH: Should we also be worried that either DBP or Land Bank will not only need to refuse for example, renewable energies and agrarian reform, emancipation borrowers -- in fact one or both of these banks will have to give notice to some of their existing borrowers na baka dalhin na lang nila yung business nila sa ibang bangko na mas willing magpautang sa kanila. Dapat ba tayong mag-aalala doon?

SSA: No your honor.

SRH: Well of course, again, Mr Sponsor, we would like to impose the burden of proof on the DoF, the Land Bank and the DBP since they claimed to the Senate during the Maharlika hearings that the P75 billion from Land Bank and DBP could be considered idle or not generating good economic returns and and could be more usefully placed as equity in the Maharlika Corporation -- could they please provide us a technical report on this, Mr Chair?

SSA: Yes, Your honor.

SRH: These are my last questions on the Maharlika on this interesting days na hinihingi yata ng isang mga bangkong ito na ibalik muna yung ininfuse nilang kapital habang nakasuspend pa ang pagimplementa ng batas na iyon hangga't hindi pa na officially na-reissue yung implementing rules and regulations. Maraming Salamat po,. Mr. Chair, Daghang salamat Mr President.

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ON CIF

SRH: With respect to the augmentation of the CIF from the Contingent Fund, as was done last year for the Office of the Vice-President, we wish to propose an amendment to the current special provision of the Contingent Fund.

Again, as a matter of fiscal prudence, we would like to include the augmentation of the CIF as a prohibition under the Contingent Fund along with the prohibition to tap the said fund for the purchase of, say, motor vehicles.

The current text is, I will just read it, Mr. President, "the amount of Thirteen Billion Pesos appropriated herein shall cover the funding requirements of new or urgent activities or projects of national government agencies, GOCCs, and LGUs that need to be implemented or paid during the year, such as, but not limited to the following: (i) legal obligation of the government arising from final and executory decisions of competent authorities, such as compromise agreements, arbitral awards, mediation settlement agreement, and professional services in connection thereto; (ii) requirements of newly created offices; or (iii) deficiencies in the appropriations for local and external travels of the President of the Philippines...In no case shall this Fund be used for the purchase of motor vehicles, including any improvements thereon."

Will the sponsor be willing to discuss this representation's proposed amendments at the appropriate time?

SAA: Yes certainly your Honor, I think there is some merit in that. But I am just being told that if it is too broad, or overbroad it may hamper some of the security agencies, your Honor. So perhaps there may be an exception to the exception, or an exception to your proposal, just in case there are emergencies. I think there have been occasions in the past where they found the need to supplement the security agencies, not just the civilian agencies.

SRH: And this representation would have no quarrel with that. Salamat sa paalala. But definitely, yung iniisip ko na ipropose na amendment at the proper time, will not pertain to security agencies that have clear national defense and public safety mandates and expertise, kundi sa mga civilian agencies na wala namang direktang mga ganoon.

SAA: Understood, your Honor.

SRH: Salamat, Mr. Chair.