President Ferdinand R. Marcos Jr. revealed on Tuesday that he turned down proposals to be part of the Maharlika Investment Fund (MIF), saying that it must be run by competent and independent financial managers to insulate it from political interference.
Speaking during the signing of Republic Act (RA) No. 11954, or the Maharlika Investment Fund Act of 2023, in Malacañang, the President said he was watching the hearings and debates in Congress about how the fund is supposed to function, with some suggesting for him to be put at the helm of the fund.
“And immediately I removed… I said I’m not in favor of having in the original iteration, the President was the chairman of the (MIF). Sabi ko, ‘no, you remove us,’” Marcos said.
“Then, there was the Secretary of Finance, no. Because inevitably, if you put me or the Secretary of Finance in the decision-making loop, those decisions will be colored by political considerations and that must not be the case,” he said.
Under RA 11954 or the Act Establishing the MIF, the Secretary of Finance is merely the ex officio chairperson and will not run the Fund. It will be governed by the nine-member Maharlika Investment Corporation (MIC) chaired by an Independent Director.
According to the President, the only way for the fund to succeed is to free it from political interference, as the government looks at potential investments and fund operation in a cold-calculating manner.
The chief executive expressed confidence that the government can find all the competent people that can handle the fund properly, as long as it is well-organized structurally.
“Structurally, we removed the political decisions from the fund and those political decisions are left with the bureaucracy, the political bureaucracy, and the fund is left to be a fund and operating on a sound and proactive financial basis,” he pointed out.
“The point being, as long as we manage it properly and I contend that we have some of the best economic managers both in government and in the private sector that we can count on to run this fund properly.”
In a statement also on Tuesday, Finance Secretary Benjamin Diokno said that the President was stating his preference that he or his Finance chief should not head the sovereign investment fund.
“Even at the early stage of the formulation of the sovereign investment fund, the President was clear: he didn’t want to politicize the Fund. He rejected the proposal to make him the Chairman of the Board of Directors of the Fund,” Diokno said.
“During deliberations in Congress, we surveyed the ‘best practice’ and found out that the Minister or Secretary of Finance usually chairs the sovereign wealth funds, and that was provided for in the final version of the MIF law.”
Diokno added that , “(n)evertheless, the Secretary of Finance will only serve in an ex officio capacity and will not run the Fund. The Independent Chairperson of the 9-member Maharlika Investment Corporation, a non-politician, will manage the Fund.
With the signing of RA 11954, the Philippines’ first-ever sovereign wealth fund, the administration is now set to prepare the implementing rules and regulations (IRR) for the creation of the MIC, which will be the sole vehicle for mobilizing and utilizing the MIF for investments.
The Fund will be invested in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, joint ventures, mergers and acquisitions, real estate and high-impact infrastructure projects, and projects related to sustainable development. PND
