Speaker Ferdinand Martin Romualdez INQUIRER file photo / MARIANNE BERMUDEZ
MANILA, Philippines — The safeguards placed on the proposal to create the country’s first sovereign wealth fund (SWF) are solid enough to guard against misappropriation, House Speaker Ferdinand Martin Romualdez told the business sector on Friday.
Romualdez, during a video message played before the Asia CEO Forum in Pasay, assured stakeholders that the House had already thought of placing safeguards when House Bill (HB) No. 6608 — the version of the Maharlika Investment Fund approved by the House — was undergoing deliberations.
“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,” Romualdez said.
“These safeguards are both proactive and punitive,” he added.
Romualdez, in particular, mentioned these six proactive safety checks under HB No. 6608:
- The Maharlika Investment Corporation (MIC), which would manage the MIF, would only be composed of persons of good moral standing, recognized independence, and those with substantial experience in investments and management
- A Risk Management Unit will be placed within the MIC to ensure that investments are safe and that risks are mitigated
- Operational costs of the MIC will be limited to just two percent of the MIF
- Books and accounts of the MIC will be subjected to examination and audit from the Commission on Audit, while having an internal and external editor
- MIC operations will be monitored by the Maharlika Investment Fund Joint Congressional Oversight Committee
- MIC and MIF documents would be made available publicly, including investments made by the corporation; statement of assets, liabilities, and net worth of the officers; and all audit reports
The Speaker also mentioned that HB No. 6608, a revised version of the original bill contained in HB No. 6398, now has penal provisions that would penalize those who are proven guilty of abusing the fund.
“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 noted.
He also stressed that enacting the MIF proposal is important as it would allow the government to pursue infrastructure and development projects without raising taxes, as investments can be used as a source of income.
“I suppose everyone will agree that no one wants new or higher taxes. The Maharlika proposal, as envisioned in House Bill No. 6608, lessens the need for government to go through these traditional modes by creating an alternative system through which funds for national development projects may be generated in an efficient and sustainable manner,” Romualdez said.
“It is a responsibility that we cannot and will not shrink from, even at the cost of precious political capital. We remain committed to our mission’s objective. At stake is nothing less than the long-term welfare and development prospects of our countrymen,” he added.
Romualdez and the other principal authors of HB No. 6608 have maintained that the bill would help the country usher in development, significantly to recover from the economic crisis brought on by the COVID-19 pandemic.
However, the bill initially met controversy after the original version included P125 billion worth of funds from the Government Service Insurance System (GSIS) and P50 billion from the Social Security System (SSS) as start-up funds — stroking fears that pensioners may lose their benefits if investments made by the MIF fail.
Eventually, the GSIS and SSS funds — including the funds from the national budget — were removed from the list of fund sources of the MIF. The final version of the bill, which the House approved before the session break last December, also explicitly stated that the MIF would never source funds from both GSIS and SSS.
READ: Proposed Maharlika Fund would no longer include SSS, GSIS funds — Quimbo
On February 12, President Ferdinand Marcos Jr. confirmed that three Japanese firms and a government financial executive expressed interest in investing in the proposed MIF during his official visit to Japan.
READ: Marcos: 3 private Japanese firms committed to investing in Maharlika fund