The Japan Bank for International Cooperation (JBIC) has expressed interest in the country’s first sovereign fund, the Maharlika Investment Fund (MIF).
This was expressed by JBIC chairman of the board Tadashi Maeda in a courtesy call of the officials of the financial institution and export credit agency to President Marcos Jr. in Malacañang on Wednesday.
Maeda also discussed alternative energy sources as potential investments in the Philippines.
The President, in welcoming JBIC’s interest, said these are the kinds of investments the country needs, “which is why the fund has been created.”
Marcos had previously endorsed the MIF which he said is expected to boost economic activity and provide funding for critical infrastructure projects in the country.
“It’s so that we, the Philippines, can participate in what would be, what is regarded, of course, as an investment for us. It is a necessary infrastructure that we are investing in,” he said during the courtesy call.
“That is the plan for the sovereign fund. We now have to go and look at the design or the structuring of the fund. But it is basically seen as our government participation in projects that, mostly, it will really be in the Philippines,” the President added.
Maeda said JBIC has recently met with local business firms and executives for potential collaborations such as with Aboitiz, Metro Pacific, and San Miguel.
He said they are particularly interested in making the liquified natural gas (LNG) a traditional source of power in the Philippines and increase of supply of alternative energy sources such as hydropower, solar and wind in the country.
Maeda also asked for more details about the country’s potential, targeted projects, and those still in the pipeline so that JBIC could “make more tangible, specific proposals to upgrade the value of the strategic cooperation.”
Meanwhile, Finance Secretary Benjamin Diokno thanked congress for the timely approval last May 31 of the MIF Act of 2023.
The House of Representatives adopted the Senate version of the bill. Senate Bill 2020 was passed on third reading with 19 affirmative votes, one negative vote, and one abstention.
“The economic team is resolute in its commitment to ensure that the entity created will be able to generate returns that will redound to inclusive and sustainable
economic growth,” Diokno said in a statement released by the Department of Finance (DOF).
“Congress’ timely passage of the Maharlika Investment Fund Act before the President’s second State of the Nation address speaks volumes of its commitment to see through the implementation of the administration’s goals,” he added.
According to the DOF statement, the MIF will optimize national funds by generating returns to support the administration’s economic goals as set in the Medium-Term Fiscal Framework, the 8-point Socioeconomic Agenda and the Philippine Development Plan 2023-2028.
The Fund will be invested in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, joint ventures, mergers and acquisitions, real estate and high-impact infrastructure projects and projects that contribute to the attainment of sustainable development.
The final version of the bill explicitly prohibits government agencies and government-owned or -controlled corporations that provide for social security and public health insurance to contribute to and invest in the Fund.
An Audit Committee will be constituted by the Board of Directors to provide recommendations on the engagement of an external auditor. It will also oversee the internal and external audits mandated under the Act.
A Risk Management Committee composed of five members will also be organized by the Board to ensure the Maharlika Investment Corporation (MIC)’s prudence in balancing risk and reward in both ongoing and new business activities.
Furthermore, the Commission on Audit shall conduct a special audit of the MIC’s books and accounts every five years.
A Joint Congressional Oversight Committee composed of seven members each from the House and the Senate will also be created to oversee, monitor and evaluate the implementation of the Act.
This also requires the MIC to submit all internal and external audit reports for each accounting period.
All MIF and MIC documents shall be open, available, and accessible to the public, as may be allowed by law, in both English and Filipino.
The implementing rules and regulations will be promulgated within 90 days from the effectivity of the Act by the Treasurer of the Philippines in consultation with the founding government financial institutions. – Jocelyn Montemayor and Angela Celis
