DONE IN JUST SIX MONTHS | Senate President Juan Miguel Zubiri poses with other lawmakers and members of the economic team after the Senate’s marathon session early Wednesday morning that ended with the passage of Senate Bill No. 2020 creating the Maharlika Investment Fund. (Photo from the Senate Public Relations and Information Bureau)
MANILA, Philippines — Lawmakers in both houses of Congress on Wednesday, May 31, 2023, approved the final version of the Maharlika Investment Fund (MIF), after adopting stiffer safeguards in its management and removing the contentious provision on financing from state pension funds.
The approval by the bicameral conference committee came less than eight hours after the Senate approved on the third and final reading its version of the measure — and six months since the first bill seeking its creation was filed in the Lower House on Nov. 28, 2022.
The committee convened on Wednesday to tackle Senate Bill No. 2020, or the proposed law creating MIF, which the House contingent agreed to adopt.
Among the most crucial amendment to the Senate’s version of the measure was the prohibition of investments in the sovereign wealth fund from the Social Security System (SSS), Government Service Insurance System (GSIS), Philippine Health Insurance Corp., Home Development Mutual Fund, Overseas Workers Welfare Administration, and Philippine Veterans Affairs Office.
President Ferdinand Marcos Jr. said on Wednesday the government had no intention of using state pension money as a “seed fund” for the MIF.
However, Marcos said it would still be up to the GSIS and SSS to invest in the state sovereign fund.
“What pension funds do [are] they invest [so] if the pension fund decides the Maharlika Fund is a good investment, it’s up to them if they want to invest in it,” he told reporters after gracing the GSIS anniversary celebration in Pasay City.
While the proposed bill, which was certified as urgent by President Marcos, was approved in record time by the Lower House in December last year, its counterpart in the Senate faced rough sailing due to concerns from both administration and opposition lawmakers on certain provisions, specifically that mandating SSS and GSIS to invest in the MIF.
Senate President Juan Miguel Zubiri expressed relief that the senators and the economic team were able to strike a compromise on the measure.
“Initially, [Sen. Mark Villar, the bill’s sponsor] was skeptical and apprehensive that the economic team might react negatively, but eventually acceded after a long conversation with the economic team,” he said in an interview with reporters.
He said the Senate’s version of the MIF made sure that it contained sufficient safeguards against possible fund misuse and abuse.
“[The bill contains] almost two to three pages of penal provisions and the punishment if the case of misuse of the funds, to the reiteration of the different laws under the penal code and under the special laws creating the plunder law, the Graft and Corrupt Practices Act and several other laws that are under the auspices or covering public servants,” he said.
Sen. Risa Hontiveros, who voted against the MIF, still welcomed the acceptance by Villar of some amendments she sought to introduce, including the exclusion of pension and welfare funds, as well as the prohibition against the appointment in the Maharlika Investment Corp. of persons with a “hint of corruption.”
“I also want to thank (Villar) and Sen. (Sonny) Angara for ensuring that there would be a 25-percent limit to the investible funds of (Development Bank of the Philippines) and the Landbank that would be exposed to the operations of the Maharlika Fund,” she said.
In a statement on Wednesday, Albay Rep. Joey Salceda, who headed the House technical working group on the proposed MIF, said “the House has decided to adopt the Senate version so that the Executive can begin crafting the rules and regulations,” adding, “we expect the president to announce that he has signed it by Sona.”
He also noted that the MIF “is the first but it does not have to be the last sovereign wealth fund that the government can create.”
Salceda also thanked the Senate for retaining most of the accountability and transparency safeguards established by the House.
The Albay lawmaker made suggestions that could be incorporated in crafting and refining the implementing guidelines, once the MIF bill is enacted.
He proposed that multilateral financing institutions such as the World Bank and the Asian Development Bank be allowed to be strategic partners with a stake in the MIF to bring in capital, experience, institutional expertise, and international credibility to the fund.
Salceda further suggested that there be a provision in the implementing rules and regulations for stock market listing as allowed in the MIF bill, to subject the fund to more transparency and public accountability standards.
While the lawmaker expressed appreciation for the removal of special exemptions, including tax breaks, he shared reservations on requiring regular dividends out of the MIF.
Opposition
Sen. Francis Escudero on Wednesday insisted that the measure establishing the MIF lacked the constitutional requirement on the creation of a government-owned and -controlled corporation (GOCC).
“As I pointed out in my amicus curiae manifestation (on Tuesday), unless they comply with the condition precedent… it might be constitutionally infirm for Congress to pass this bill,” the senator said.
Escudero was referring to Article XII Section 16 of the 1987 Constitution, which states that GOCCs “may be created or established by special charters in the interest of the common good and subject to the test of economic viability.”
A progressive teachers’ group on Wednesday also criticized the Senate’s hasty approval of the MIF, saying that the country was facing education crises that needed to be addressed first.
With many reports coming out about the worsening crisis of learning conditions in the country, the Alliance of Concerned Teachers said the MIF should not be the government’s priority bill.
House Deputy Minority Leader and ACT Teachers party-list Rep. France Castro also said in Filipino: “So-called amendments on the final Senate version of the MIF cannot resolve the fact that the country does not have surplus cash and that the bulk of the money cannot come from the government.”
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