Support for the revised Implementing Rules and Regulations (IRR) of the Maharlika Investment Fund (MIF) continued to pour in, a day after it was released and published on various official platforms by the Office of the President last Saturday.
In a statement, Speaker Ferdinand Martin G. Romualdez lauded President Ferdinand R. Marcos Jr. for his commitment to strengthen the independence of the Board of Directors of the Maharlika Investment Corporation (MIC).
Speaker Romualdez added that President Marcos’ move will also enhance the corporate governance and ensure that the MIF is managed with utmost transparency and accountability.
“The autonomy of the MIC Board allows for more objective and effective decision-making, free from undue political influence. This is crucial in overseeing a fund of this magnitude, which is pivotal to our nation’s economic growth,” Romualdez said.
“The final IRR, as introduced by the President, clarify the Board’s discretionary powers while ensuring adherence to the law and alignment with the nation’s socioeconomic development program,” he added.
“The MIF, if managed independently and efficiently, can significantly contribute to the nation’s socioeconomic development, aligning with the government’s broader goals.”
Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman echoed Speaker Romualdez’s sentiments as she commended President Marcos’ earnest support to fully operationalize the MIF through the revised IRR.
Secretary Pangandaman also emphasized that she is banking on the assurance of President Marcos that the MIC Board will be given freedom to oversee the fund without any political interventions that will impede its fulfillment of functions.
“I am glad of this development, as this shall allow the MIC Board to have the liberty and flexibility to fulfill its mandate, and explore beneficial investment opportunities while adhering faithfully to the letter of the law and ensuring high-impact investments that are in line with the country’s socioeconomic development policies and programs,” Pangandaman said.
“This will also improve accountability, openness, and efficacy in carrying out the law’s provisions. Further, with the issuance of the IRR, we remain positive that the MIF will be functional by the end of this year, on track and consistent with the timeline given earlier,” she added.
“As a member of the Philippine economic team, I commit my full and unequivocal support for the smooth implementation of the MIF’s IRR, with trust and confidence that MIF’s managers will perform their duties and responsibilities to the best of their abilities for the good of the nation.”
Office of the Presidential Adviser for Investment and Economic Affairs Raphael DC Consing Jr. also expressed his support for the revised IRR of the MIF as it “grants the board the flexibility to determine the optimal composition, qualifications and reporting requirements of the MIC’s Audit Committee and Risk Management Committee.”
Consing also highlighted the importance in coming with the revised IRR.
“In respect of the Audit Committee, the old IRR specifically outlined the membership of the committee which involved two senior executives of the MIC. It is important to remember that its primary purpose is to provide independent oversight of the company’s financial reporting process,” Consing said.
“Including senior executives on the Audit Committee raises the risk that investors and the public may perceive the committee as being biased towards management and could undermine the committee’s independence and credibility,” he added.
“Thus, it is not advisable for companies to include senior executives in Board Audit Committees.”
Consing added the revised IRR is not the appropriate forum for outlining specific rules on board risk management oversight as he emphasized that it is intended “to provide general guidance” on the implementation of the MIC and “not to prescribe specific rules and procedures” for its operation.
He stood firm that best practices in enterprise risk management recommended that the Board Risk Management Committee should be responsible for developing and implementing the company’s risk management system, including the development of specific rules and procedures for board risk management oversight.
“If the Revised MIC IRR outlines specific rules on board risk management oversight, it could restrict the flexibility of the first set of incoming Board of Directors of MIC to develop a risk management system that is best suited for the company,” Consing said.
As far as the Development Bank of the Philippines (DBP) and the Landbank of the Philippines (Landbank) are concerned, Consing stood firm that the financial institutions can rebuild its respective Tier 1 capital through their retained earnings.
Consing added that both DBP and Landbank can further raise a variety of bonds to boost their liquidity, and issue instruments in both the domestic and global capital markets that qualify Tier 1 and Tier 2 capital to enhance their capital position and mitigate their capital deficiency.
“Both DBP and Landbank have strong track records in accessing the global capital market. And I have no doubt that international investors will continue to support them,” he added.
The OP released on Saturday the revised IRR of the MIF with assurance from President Marcos that the members of the MIC will exercise independence to give the body more latitude in managing the fund, resulting in the promotion of good corporate governance.
Monetary Board Member and former Treasurer of the Philippines Rosalina De Leon emphasized that “the reason for removing the qualifications in the IRR is to give more independence to the Board in determining the specific qualifications of the other officers of the MIC in order to carry out its mandate to efficiently manage the MIF.”
“The President wants the Board to be insulated from political influence and considerations and would like to give the leeway to set the qualifications in the best way they know how based on their experience and expertise in fund management,” De Leon added.
Under Section 21 of the Republic Act 11954, or the law creating the MIF, the nine-member MIC Board have the power to govern and manage the corporation, its assets, and investments in accordance with the law.
The MIC Board will be composed of nine members such as the Secretary of Finance sitting as the Chairperson in an ex-officio capacity, the President and the Chief Executive Officer (PCEO) as the MIC Vice Chairperson, President and CEO of the Land Bank of the Philippines, President and CEO of the Development Bank of the Philippines and three Independent Directors from the private sector. *PND*
