SOVEREIGN WEALTH FUND President Marcos signs the Maharlika Investment Fund into law on Tuesday, July 18, 2023, establishing the nation’s first sovereign wealth fund. —PHOTO BY MARIANNE BERMUDEZ
MANILA, Philippines — President Ferdinand Marcos Jr.’s decision to stay out of managing the newly enacted Maharlika Investment Fund (MIF) protects it from being politicized, House Speaker Ferdinand Martin Romualdez said on Wednesday.
In a statement, Romualdez lauded the President for disregarding suggestions that he or the Finance Secretary be the Maharlika Investment Corporation (MIC) chairperson — the body that would manage the MIF — as independent managers should run it to avoid political interference.
The Speaker emphasized that Finance Secretary Benjamin Diokno would only serve as an ex-officio chair on the President’s directive to keep MIC independent.
“President Marcos’ demand for MIF investment decisions and management to be predicated solely on sound financial and business practices manifests his resolve to ensure the fund is adequately safeguarded and would grow to achieve its purpose,” Romualdez said.
“It is a prudent move on the part of the President that would bolster its potential to achieve its purpose of mobilizing additional funds without the need for additional borrowings or taxes to accelerate the implementation of flagship infrastructure projects meant to sustain the country’s robust growth,” he added.
Republic Act No. 11954, which contains the MIF, stated that the MIC would have nine board members, including the Finance Secretary, the MIC chief executive officer (CEO), the president and CEO of the Land Bank of the Philippines, the president and CEO of the Development Bank of the Philippines (DBP), two regular directors, and three independent directors.
All of the directors, however, would be appointed by the sitting president, while the other officials are appointed, like the Finance Secretary, the LandBank president, and the DBP president.
READ: All Maharlika Investment Corp. board members are presidential appointees
Still, Romualdez is optimistic that the MIC would be filled up with officials of high integrity and would be managed well, considering that administration officials have checked several sovereign wealth funds of other countries to learn and avoid mistakes.
“With competent managers of proven track record and unquestioned integrity running the MIF, I am confident that it would eventually provide significant contributions to widen our fiscal space and finance projects that would create jobs and uplift the lives of our people,” Romualdez said.
After months of controversies surrounding the then-proposal, President Marcos signed the bill’s ratified version into law on Tuesday, in front of its proponents in the House and Senate — including Romualdez and Senator Mark Villar.
READ: Bongbong Marcos signs Maharlika Investment Fund into law
Initially, after it was filed last November 2022, there were concerns about why the proposed MIF would utilize funds from government-owned insurance companies like the Government Service Insurance System (GSIS) and the Social Security System (SSS) — raising questions about whether the pension funds might be in danger should the MIC make wrong investments.
READ: Proposed Maharlika fund just needs the President’s signature to become a law
Eventually, it was announced that GSIS and SSS funds would no longer be included.
Romualdez and other solons also said it would stop the country’s reliance on foreign loans to support infrastructure projects.