Speaker Martin G. Romualdez on Friday assured businessmen and the public in general that the proposed Maharlika Investment Fund (MIF), a sovereign wealth fund, would not be abused.
Romualdez made the assurance in a recorded video message before the Asia CEO Forum at the Manila Marriott hotel Friday.
“As far as the issue of possible misuse and abuse of the fund, let me assure everyone that your House of Representatives is keenly aware of your concern. For this reason, we have seen fit to incorporate adequate safeguards in House Bill No. 6608 to ensure that the funds are invested properly. These safeguards are both proactive and punitive,” he said.
He enumerated the MIF’s proactive safety checks, including transparency provisions and the requirement to subject the books of accounts of the Maharlika Investment Corp. (MIC), which will manage the fund, to three layers of audit by an internal auditor, an external auditor and the Commission on Audit (CoA).
The audits will include an assessment of whether investments are made in compliance with the Santiago principles, a set of guidelines designed to promote good governance, accountability, transparency, prudent investment practices, and a stable and open investment climate.
The MIC’s operations will also be monitored by the Maharlika Investment Fund Joint Congressional Oversight Committee.
HB 6608 also provides that all Maharlika documents will be open to anyone who wishes to review them, including reports from the internal auditor, external auditor, and CoA.
The MIC management will be made up of persons of good moral standing and reputation, of recognized probity and independence, with substantial experience and expertise in corporate governance and administration, investment in financial assets, and management of investments in the local and global markets.
A small portion of investible funds of the Land Bank, Development Bank of the Philippines, and Bangko Sentral ng Pilipinas would be pooled and placed under the management of MIC as the initial capital which will be the Maharlika Investment Fund.
The bill also identifies financial instruments where the fund could be used, including foreign currencies, domestic and foreign corporate bonds, Sukuk or Islamic bonds, mutual funds, joint ventures, and commercial real estate and infrastructure projects.
MIC can only participate in government projects that are approved by the National Economic and Development Authority (NEDA), ensuring that the MIF is used for purposes that support the government’s socio-economic development plan.
“If these pro-active provisions are not enough, House Bill No. 6608 also provides heavy penal provisions and criminal sanctions to hold accountable and punish any director, trustee, or corporate officer who is proven to have abused the management of the Maharlika Investment Fund,” Romualdez said.
He said any erring MIC official can be charged with malversation or plunder, depending on the amount embezzled.
He said the mission of the House in pushing for the creation of MIF is clear: “to help resuscitate the pandemic-battered economy and make economic transformation the engine that will uplift the lives of our people.”
“From the swift passage of the General Appropriations Act of 2023 to the passage on third and final reading of important measures such as the Virology and Vaccine Institute of the Philippines Act, the Health Emergency Auxiliary Reinforcement Team Act, as well as the Maharlika Investment Fund proposal, to the move to amend the restrictive economic provisions of the 1987 Constitution – the welfare of the Filipino people and the economic development of the country is always the paramount consideration,” he said.
The House leader encouraged those who could contribute their input to improve the MIF bill and other pieces of legislation to make their ideas known and present their proposals.
“We at the House of Representatives do not claim monopoly on development solutions. If there is anyone who has more creative ideas on how to support national development, by all means, make them known,” he said.
He said the House “is more than happy and willing to receive these ideas, so that these may be refined and fine-tuned over the course of the legislative process.”
“I am confident in every Filipino’s innate ability to find practical solutions to many of our problems. Let us work together towards a brighter future for the Philippines. With unity of spirit, there is truly nothing we cannot do,” Romualdez said.
At the same forum, Finance Secretary Benjamin Diokno presented the MIF as a tool that will further spur progress and economic development in the coming years.
The MIF bill is currently ending at the committee level in the Senate.
“The Maharlika Investment Fund, which shall be the country’s first-ever sovereign investment fund, is designed to promote economic development by making strategic and profitable investments in key sectors,” Diokno said.
Diokno cited key examples such as public road networks, tollways, green energy, water, agro-ndustrial ventures, and telecommunications, which offer better rates of return and greater socioeconomic impact.
In the near and medium term, he said the passage of the MIF will widen the country’s fiscal space and ease pressures in financing public infrastructure projects. Currently, the national budget, public-private partnership arrangements, and official development assistance serve as the Philippines’ main finance mechanisms for infrastructure projects.
“The fund is an additional vehicle that would allow the government to tap surpluses that cannot be utilized under current legal frameworks. It will also be open to co-financing with foreign investors and multilateral institutions to facilitate financing of capital-intensive, big-ticket infrastructure,” Diokno said.
