WITH the signing by President Marcos Jr. of the bill creating the Maharlika Investment Fund (MIF) into law, we expect a more subdued debate on the merit of creating the country’s first sovereign wealth fund. Absent a challenge filed with the Supreme Court and a favorable ruling on it, which might take a few months to see fruition if found to be meritorious, all we can do now is to accept that Marcos and his economic team, through the full support of Congress, have won.
In the next 90 days, the Bureau of Treasury and other agencies will be very busy drafting the implementing rules and regulations as government prepares to form a new corporation, the Maharlika Investment Corp. (MIC), a super GOCC that will manage the fund.
Going by its intentions, Republic Act 11954 which establishes the MIF should be worthy of popular support; after all, the fund is contemplated to become a revenue-generating engine for the government by making profitable and strategic investments in key sectors here and abroad. The government expects the fund to help in realizing over 190 projects approved by NEDA.
‘Our hope is that the fund will be run professionally and judiciously by competent fund managers and directors.’
For any investment fund to succeed, it has to have enough capital to invest and take on challenges various investment opportunities offer. But the MIF has only P75 billion as seed capital, contributed by the Land Bank of the Philippines and the Development Bank of the Philippines, and will need capital infusion from two-year dividends coming from the Bangko Sentral ng Pilipinas (BSP) and earnings from the Philippine Amusement and Gaming Corp. Other government agencies, GOCCs and revenue-generating sectors may join as fund contributors later, within the limits of the law, particularly their charters.
Since the MIF is already a fait accompli, the nation is left with no other option but to accept it. Our hope is that the fund will be run professionally and judiciously by competent fund managers and directors.
Under RA 11954, the MIC will be governed by a board of directors with nine members chaired by the finance secretary. Within the MIC is an advisory body which will assist the board of directors in the formulation of the general policies on investment and risk management.
President Marcos’ admonition to make sure the fund is well-run by professionals who will shun political decisions in favor of purely financial ones is rather vague because the broad masses of Filipinos do not have a say on how the MIC will be managed. A recent survey among citizens even revealed only a few Filipinos know about the MIF.
Planning Secretary Arsenio Balisacan believes the MIF will complement the country’s investment platforms and help fund the government’s flagship projects, particularly infrastructure.
MIF critics say the funds to be contributed by the two state banks will mean less loans for the agriculture and small business sectors. Also, depriving the BSP two years of dividends will impact negatively on its capitalization, and it might find it hard to intervene when a financial emergency happens to the peso.
As Marcos is hell bent on implementing the MIF, we hope he succeeds but let us also follow through our common concern that the fund is run professionally well.
