The Maharlika Investment Fund bill approved by the House of Representatives before it adjourned last week for the Christmas break is, for all intents and purposes, an investment in the nation’s future.
How will it do that?
Once approved by the Senate and enacted into law, the Maharlika Investment Fund or MIF will utilize surplus money and investible funds of government to sustain the country’s economic growth.
The MIF is similar to the Sovereign Wealth Fund (SWF) now existing in 70 countries in various parts of the world.
Most of the SWFs in the world today have grown in size over the years.
Of the 70 countries with SWFs, only one has failed because of the lack of transparency and an effective auditing mechanism.
Congress came up with the MIF because, it said, it did not want to impose new taxes that would mean an additional burden for ordinary Filipinos.
Instead of taxes, lawmakers decided to tap surplus funds for long-term economic development programs and projects.
The government will set up a new corporation to be called Maharlika Investment Corporation.
This entity will have its own charter and will be supervised by the Securities and Exchange Commission and the Securities Regulation Code.
The MIC will be governed by a Board of Directors with 15 members, including the Secretary of Finance as chair; a Chief Executive Officer; the presidents of the Land Bank of the Philippines and the Development Bank of the Philippines; seven regular members from government financial institutions; and four independent directors from the private sector.
It will also have an Advisory Body composed of the Secretary of the Department of Budget and Management, the NEDA Director General, and the National Treasurer.
The MIF will have an initial capital of P110 billion from the LandBank (P50 billion); DBP (P25 billion) and the balance from the 100 percent dividends of the Bangko Sentral ng Pilipinas.
On its second year, the fund will increase some more from BSP dividends, 10 percent of earnings of PAGCOR and other government-owned gaming operators; and earnings from royalties and special assessments from the country’s natural resources.
But a crucial aspect of the MIF is protecting it from those all too eager to dip their fingers into the cookie jar.
It will be run like a corporation and be completely transparent in its operations.
It will have a Risk Management Unit consisting of five members with extensive experience in finance, economics, and investments.
The fund will be monitored by a Joint Congressional Oversight Committee composed of five senators and five members of the House of Representatives.
The fund will have three audit layers: internal, external (consisting of internationally accredited auditors), and the Commission on Audit.
All the books of accounts of MIC will be open to scrutiny by the Commission on Audit as mandated by the Philippine Constitution.
With built-in mechanisms to ensure zero-tolerance for corruption, the MIF will be a key instrument for the country’s socio-economic development—and offers the prospect of further reducing poverty and a better quality of life for all Filipinos.