At least eight measures are in place to ensure the integrity of the proposed Maharlika Wealth Fund (MWF), the Bureau of the Treasury (BTr) said in a statement yesterday.
“We support the calls to study the bill to ensure that risk management is in place,” National Treasurer Rosalia de Leon said.
“Upon reading the bill, we note that there are already eight measures that will safeguard the integrity of the Fund,” she added.
De Leon enumerated the eight safety measures, first of which is that the MWF will strictly adhere to the Santiago Principles, a voluntary set of 24 guidelines observed by more than 20 countries with sovereign wealth funds designed to promote good governance, accountability, transparency and prudent investment practices as well as maintain a stable and open investment climate.
Second, all financial transactions shall be governed by the applicable government laws, rules and regulations.
Third, there will be an internal audit. There will be financial reporting and audit of records wherein the financial statements and reports shall be prepared, upon the advice of the advisory body, in accordance with pertinent provisions of the act and its implementing rules and regulations (IRR), as well as international financial reporting standards and principles.
The board shall appoint an internal auditor who shall provide written interim financial and management reports as requested by the advisory body.
Fourth, there will be an internationally recognized auditing firm that will be the external auditor of the fund to audit its financial statements.
Fifth, the fund will be under the scrutiny of the Commission on Audit (COA). The books and accounts of the MWF shall be subject to the examination and audit of COA pursuant to Article IX of the 1987 Philippine Constitution.
Sixth, there is an advisory body that will assist the board of directors in the formulation of general policies related to investment and risk management. The advisory board will be sought for consultation in case of transactions that will affect balance of payments and monetary aggregates, especially those which impact domestic liquidity and reserve money.
The advisory body is composed of the Secretary of Finance, the Secretary of Budget and Management, the Treasurer of the Philippines and the Socioeconomic Planning Secretary of the National Economic and Development Authority.
Seventh, a Joint Congressional Oversight Committee is tasked to oversee, monitor and evaluate the implementation of the Maharlika Wealth Fund Act. This will be composed of five members each from the House of Representatives and the Senate.
Finally, there is a specific provision to prevent unnecessary withdrawals from the fund. Section 15 of the bill states that no withdrawals of equity shall be made before 2028 and that, thereafter, equity withdrawals shall be made in accordance with the guidelines prescribed by the board or the IRR of the act.
“We agree that we need to ensure that all these safeguards are in place for the protection of the funds of the people. However, with the proper safety measures, I believe we should be able to proceed with the Maharlika Wealth Fund as this will ultimately benefit our people,” de Leon said.
