More needs to be fixed, clarified on Maharlika bill: Escudero

Escudero added that the composition of the MIF’s Board of Directors must be based on the contributions of each investor. (File Photo: Voltaire F. Domingo/Senate PRIB via Senate of the Philippines/Facebook)

MANILA – The proposed Maharlika Investment Fund (MIF) has some “unclear” provisions, including investment gains and composition of its board of directors, in both the House and Senate versions, Senator Francis Escudero said Wednesday.

Escudero on Wednesday sought clarifications from the government economic managers during the first hearing on the bill by the Senate Committee on Banks.

He said among his concerns was the “authorized capital stock” of the Maharlika Investment Corporation (MIC) which was not stated in both measures.

“Hindi tayo pwedeng gumawa ng korporasyon na walang authorized capital stock. Sa lahat ng tao, alam dapat ng economic managers natin ‘yan (We cannot put up a corporation which do not have authorized capital stock. Of all the people, the economic managers should know that),” Escudero said.

Escudero added that the composition of the MIF’s Board of Directors must be based on the contributions of each investor.

Under the proposal, the Landbank of the Philippines (LBP) and the Development bank of the Philippines (DBP) shall contribute PHP50 billion and PHP25 billion, respectively.

In both the House and Senate versions, the MIC will be composed of the Secretary of Finance, the Chief Executive Officer of the MIC, the Presidents of the LBP and DBP, six regular members representing contributors to the fund, and five independent directors from the private, academe, business and investment sectors.

“Hindi ba dapat ‘yung Board of Directors limampung porsyento galing sa Landbank? Dalawampung porsyento galing sa DBP? Binigyan lang nila ng tig-iisang representative ang Landbank at DBP (Shouldn’t Landbank be given 50 percent [seat] in the Board of Directors? 20 percent from DBP? The only gave them one representative each),” Escudero said.

“Maganda mula’t mula, dahil din unang beses nating ginagawa ito, klaro na (It is better if it should be clear from the start, because we are just doing this for the first time),” he added.

During the hearing, National Treasurer Rosalia de Leon said there would be regular members representing the contributors.

“Each government financial institution may increase its investment above the required equity contribution and they shall be entitled to prudential and other regulatory reliefs as may be determined by the Bangko Sentral ng Pilipinas to ensure their financial soundness while contributing to the overall objective of the Fund,” De Leon said.

The measure also proposes that the Philippine Amusement and Gaming Corporation and other government-owned gaming operators contribute at least 10 percent of their gross gaming revenues.

Other sources of funding also include royalties and special assessments on natural resources based on the fiscal regime to be implemented by the national government proceeds from the privatization of government assets and public borrowings.

Senator Mark Villar, who chairs the Committee on Banks, said he filed Senate Bill No. 1670 to start the discussions on the MIF after the House of Representatives had approved their version on Dec. 15, 2022.

“The Senate, being an independent institution, will perform its duty and responsibility to review and discuss measures affecting national interest. We will not rush. We will take our time in order to arrive at the best version possible for the benefit of the Filipino people,” Villar said.

Although he certified the measure as urgent, President Ferdinand R. Marcos Jr. earlier asked the Senate to scrutinize the proposed MIF.