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The proposed multi-billion peso Maharlika Investment Fund (MIF), according to a House leader on Monday, will help ensure the responsible and open management of public funds.

Irwin Tieng, chair of the House Committee on Banks and Financial Intermediaries, stated that the establishment of an independent MIF will abide by the principles of good governance, openness, and accountability in introducing House Bill 6608 to the plenary.

According to Tieng, the MIF includes several measures that guarantee its accountability and openness. As stated in the Santiago Principles, “The MIF provides that it shall adhere with the guidelines that assign best practices for the functioning of the sovereign wealth fund.”

The change in capitalization and funding, which will come from the Land Bank of the Philippines and the Development Bank of the Philippines, is one of many revisions to the bill, according to him.

In the initial draft of the bill, it was suggested that the contentious MIF’s funding would come from public financial institutions like the Social Security System (SSS) and the Government Service Insurance System (GSIS).

Rep. Stella Quimbo of Marikina, who serves as vice head of the appropriations committee, stated that the MIF would depend on dividends from the Bangko Sentral ng Pilipinas, the country’s central bank.

Tieng stated that a different board composition with the Secretary of Finance sitting as the chairperson and additional independent directors from the business sector being included is another proposed reform.

Tieng also stated that a 15-member board, chosen based on strict standards of expertise and professional experience in investment management and financial problems, will be in charge of running the company.

It will be expected to publish an annual report, and the Commission on Audit, an internal auditor, and an independent external audit firm will all review its financial and investment performance.

He pointed out that MIF is required to regularly and promptly post information on its website and other platforms so that the public is aware.

The establishment of the MIF, he continued, “becomes important as the Philippines solidifies its place, not only as the rising star of Asia but as a real economic leader in the Asia-Pacific.”

In the meantime, Deputy Speaker Aurelio Gonzales Jr. declared his support for Speaker Martin Romualdez’s proposal to establish a sovereign wealth fund, claiming that it would use investable government resources to boost its profitability for the benefit of future Filipino generations.

“We all support the Speaker’s MIF proposal. It is admirable to aim to maximize or optimize returns on investments made using surplus governmental resources or assets. Every country on the earth would desire to accomplish that, Gonzales added.

Rep. Florida Robes of San Jose del Monte City stated that the House wants to include sufficient protections in the MIF bill to thwart potential fraud, corruption, and misappropriation of funds.

“Our nation and every Filipino will benefit greatly from Speaker Martin’s proposal,” Robes stated.

Rep. Margarita Ignacia Nograles, a member of the PBA Party-list, claimed that the House included protections against corruption, fraud, and other potential misconduct as a result of taking the public’s suggestions into account regarding the planned MIF.

“The penalty clauses or provisions are the most significant of them. The public is concerned about potential bribery, corruption, and scandals, so we aim to prevent them. Therefore, Nograles added, “We want the sanctions to be online with those found in the Corporation Code.

She said that the earmarking of 20% of MIF income for social projects is another addition to the plan.

President R. Ferdinand Marcos Jr.’s economic advisers have also endorsed the idea, saying it will act as an investment vehicle to advance the administration’s Agenda for Prosperity and meet the nation’s financial objectives.

The government fund’s “direct and intergenerational benefits” were emphasized by the finance secretary, the budget secretary, the socioeconomic planning secretary, and the governor of the Bangko Sentral ng Pilipinas in a signed joint statement on Friday.

Direct benefits, according to them, include more funding for and investments in large-scale infrastructure projects, high-return green and blue initiatives, and rural development. Intergenerational benefits, meanwhile, include better access for future generations to income from investments, such as potential profits from extracted natural resources like those from mining.

Without a doubt, the establishment of the MWF will contribute to accomplishing the goals for inclusive and sustainable economic growth set forth in the 8-Point Socioeconomic Agenda, the Philippine Development Plan 2023–2028, and the Agenda for Prosperity, they stated.

According to them, a sovereign wealth fund will increase fiscal room and lessen fiscal pressures in the short and medium term as it pursues public infrastructure projects. It will also lessen uncertainty in situations where fund resources are directed to high-yielding financial ventures and assets that are underinvested amid high inflation and the pandemic’s lingering effects.

They expressed their confidence in the effective use and administration of this investible public money under the supervision of professionals.

Given more layers of checks and balances in the use of investible funds, they claimed, “They will be able to ensure the availability of an alternative high return investment platform, obtain the best absolute return for the funds, find additional sources of liquidity as the need arises, and perform better risk management.”

The measure establishing the MWF should be passed right away, according to the economic team, since this will spur growth and aid in the nation’s “economic change towards inclusion and sustainability.”

“Do not impede economic development. Please do not deny our people this chance at wealth “they claimed.

They expressed gratitude to President Marcos for recognizing the advantages of a sovereign wealth fund as well as to the parliamentarians for their “openness” in consistently refining the bill.

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