Marcos inks MIF bill into law

MAHARLIKA INVESTMENT FUND. President Ferdinand R. Marcos Jr. on Tuesday (July 18, 2023) signs Republic Act 11954 or the Maharlika Investment Fund Act of 2023 at the Kalayaan Hall of Malacañan Palace in Manila. Marcos said the MIF is designed to drive economic development in the country. (PNA photo by Rolando Mailo)

MANILA – President Ferdinand R. Marcos Jr. on Tuesday signed into law a bill establishing the Maharlika Investment Fund (MIF), the Philippines’ first-ever sovereign wealth fund.

Marcos signed Republic Act (RA) 11954 in a ceremony at the Kalayaan Hall of Malacañan Palace in Manila.

In a keynote speech, Marcos said the MIF is designed to drive economic development in the country.

“The MIF is a bold step towards our country’s meaningful economic transformation. Just as we are recovering from the adverse effects of the pandemic, we are now ready to enter a new age of sustainable progress, robust stability and broad-based empowerment,” Marcos said.

“We now have an available fund that will provide us the seed money for investments and to attract other foreign investments and for us to be able to participate in those operations, in those investments without additional borrowings,” he added.

Following the signing of RA 11954, Marcos said his administration would “go out to the world and do the changes that are necessary for the Philippines to become an investment-friendly nation.”

“The fund will fail if we do not make money on the fund. It’s that simple… That is why we put up a Maharlika Fund so as to be able to give us the capacity and the ability to join in those investments, be part of that,” he said.

He reiterated that he would make sure that the MIF would be “well-run” by professionals.

He added that the country has the “best” economic managers both in government and the private sector to ensure the proper management of the MIF.

“Let us make sure that the decisions that are being made for the fund are not political decisions, that they are financial decisions because that is what the fund is,” Marcos said.

The MIF is established to optimize national funds by generating returns to support the Marcos administration’s economic goals laid out in the Medium-Term Fiscal Framework, the 8-point Socioeconomic Agenda, and the Philippine Development Plan 2023-2028.

In a separate statement, Budget Secretary Amenah Pangandaman said the Department of Budget and Management (DBM) will continue to provide support and technical assistance in the formulation of the implementing rules and regulations of RA 11954.

“The creation of this development fund is very good news because this means we now have an opportunity to expand our fiscal space for the government’s priority programs,” Pangandaman said. “Of course, we fully support this as it will help expand our fiscal space. So we at the DBM remain committed to helping ensure that this development fund will be a success and implemented with utmost integrity.”

Under RA 11954 , the MIF will be used to invest 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 that contribute to the attainment of sustainable development.

The establishment of the MIF will provide the government with a long-term source of income, as well as ease the burden on the national budget by providing additional funding for other priority projects of the government.

Unlike other government-owned or -controlled corporations (GOCCs), the MIF will be able to maximize government assets through its investments in projects that generate bigger returns.

The proposed measure seeks the establishment of the Maharlika Investment Corp. (MIC), which will act as the “sole vehicle for the purpose of mobilizing and utilizing the MIF for investments in transactions in order to generate optimal returns on investments (ROIs).”

The MIC is expected to have at least PHP75 billion in paid-up capital this year, with PHP50 billion sourced from the Land Bank of the Philippines and PHP25 billion from the Development Bank of the Philippines.

The law prohibits government agencies and GOCCs that provide for social security and public health insurance to contribute to and invest in the Fund.

These include the Social Security System, Government Service Insurance System, Philippine Health Insurance Corporation, Home Development Mutual Fund, Overseas Workers Welfare Administration, and Philippine Veterans Affairs Office pension fund.

The law mandates the Commission on Audit to conduct a special audit of the MIC’s books and accounts every five years.

All MIF and MIC documents will also be open, available, and accessible to the public, as may be allowed by law, in both English and Filipino.