MANILA — The establishment of the Maharlika Investment Fund is “proceeding apace” as the measure is just being improved to make it “as close to perfect and ideal as possible,” President Marcos said yesterday as he denied putting it on hold when he announced its suspension in a memorandum he issued earlier.
“I was a bit alarmed by the news reports early this morning that I read in the newspapers, that we have put the Maharlika Fund on hold. Quite the contrary,” the President told reporters at the Villamor Air Base shortly before his departure for Saudi Arabia.
“The organization of the Maharlika Fund proceeds apace. And what I have done though is that we have found more improvements that we can make specifically to the organizational structure of the Maharlika fund,” he added.
Marcos said the concept of Maharlika as an investment fund “remains a good one” and that his administration remains committed to having it operational before the end of the year.
In a memorandum dated Oct. 12, the President – through Executive Secretary Lucas Bersamin – ordered the national treasurer to suspend the implementing rules and regulations (IRR) of the Maharlika Investment Fund law, which aims to create a vehicle for profitable investments in key sectors and vital infrastructure projects.
The memorandum was addressed to Bureau of the Treasury officer-in-charge Sharon Almanza, Land Bank of the Philippines president and chief executive officer Lynette Ortiz, and Development Bank of the Philippines (DBP) president and CEO Michael de Jesus.
Marcos issued the memorandum a day after the Landbank and DBP revealed having requested the Bangko Sentral ng Pilipinas for “regulatory relief” from its capital requirements after being required to give up P75 billion of their capital for the Maharlika Fund buildup.
According to Bersamin’s office, Marcos simply wanted to study the IRR carefully to ensure that the purpose of the fund is realized and safeguards are in place “for transparency and accountability.”
House Deputy Minority Leader and ACT-Teachers party list Rep. France Castro has called for the scrapping of the Maharlika Investment Fund law, saying the suspension of its IRR was a proof that the law is “rushed and flawed on so many levels.”
Sen. Risa Hontiveros, a member of the opposition, said the law is “beyond repair” and that the Philippines is not yet ready to support a wealth fund.
But Marcos said his administration’s move regarding the Maharlika Fund should not be misinterpreted, as efforts are underway to improve the fund.
“We should not misinterpret what we have done as somehow a judgment on the rightness or wrongness of the Maharlika fund,” the Chief Executive said.
“On the contrary, we are just finding ways to make it as close to perfect and ideal as possible. And that was what we have done,” he added.
According to Marcos, consultations have been made not only with economic managers but also with other concerned individuals.
“And that’s why their inputs had been very important and that is why we are going to now utilize them to make it a better organization,” he said.
“And with that in mind, we are encouraged by the reaction of our friends in the Middle East and for that matter around the world to the fund and we’re very encouraged that we are going down the right path,” he maintained.
Marcos said introducing the Maharlika Investment Fund to Middle East countries is one of the important objectives of his two-day trip to Saudi Arabia.
A pet measure of the administration, the Maharlika Investment Fund Act or Republic Act 11954 was signed into law last July 18 while its IRR was issued on Aug. 28. The law’s enactment is seen to hasten the implementation of 194 infrastructure projects approved by the National Economic and Development Authority.
The measure involves the creation of the Maharlika Investment Corp. (MIC), which will serve as the sole vehicle for mobilizing and using the sovereign wealth fund.
In a speech during the enactment of the Maharlika law, Marcos said he had rejected a proposal to make him the chairman of the MIC to ensure that investment decisions would not be influenced by politics.
Under the law, a nine-person board of directors will govern the MIC. The finance secretary will sit as the chairperson in an ex officio capacity. Other members of the board are the president and chief executive officer of the MIC, who will serve as the vice chairperson, the president and CEO of Landbank, president and CEO of DBP, two regular directors, and three independent directors from the private sector.
The MIC will have a P500 billion authorized capital stock, P375 billion of which will have common shares available for subscription to the national government and its agencies or instrumentalities, and to government-owned and controlled corporations as well as to government financial institutions.
The remaining P125 billion in capital will have preferred shares available for subscription to the same national government agencies and institutions as well as to reputable private financial institutions and corporations. (philstar)
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