Diokno says Maharlika Fund IRR ensures board's independence, credible oversight bodies

The Department of Finance (DOF) on Monday expressed full support to the amendments on the Implementing Rules and Regulations (IRR) of the Maharlika Investment Fund (MIF) Act.

In a statement, DOF Secretary Benjamin Diokno added that oversight and risk management bodies will be created for the MIF.

“In particular, the IRR’s emphasis on ensuring the independence of the Board of Directors of the Maharlika Investment Corporation (MIC) allows it more headroom to form credible oversight and risk management bodies while upholding the highest standards of effective fund management," he said.

Malacañang released on Saturday the MIF's revised IRR, giving the president authority to accept or reject nominees submitted by the MIC’s Advisory Body for positions on the Board.

It also removed the specific advanced educational degree requirements for those who can be appointed to manage the sovereign wealth fund.

According to Diokno, the changes in the IRR are within the bounds of the law and intended for a strong corporate governance structure.

“Most importantly, this affirms the Marcos Jr. administration’s commitment to see the Fund off and running by the end of the year and effectively paves the way for the full operationalization of a well-structured, robust, and effective sovereign wealth fund that will advance the Philippines’ long-term growth,” he said.

For Diokno, the timing of the finalization of the MIF is favorable as local and international investors have already signified interest in the MIF, as shown in several investor promotion engagements.

The Presidential Communications Office earlier called for applications and nominations for the MIC officers on September 12, 2023. The six candidates include the MIC president and CEO, two regular directors, and three independent directors.

Several groups earlier expressed concern over the MIF — the Makati Business Club, the Management Association of the Philippines, and the Philippine Chamber of Commerce and Industry.

Diokno said then that criticisms of the measure come from those who have yet to read it in full, as safeguards would be put in place to ensure transparency.

Fortifying autonomy of board

House Committee on Banks and Financial Intermediaries chairman and Manila lawmaker Irwin Tieng agreed with Diokno, saying that the IRR revisions are aimed at fortifying the autonomy and governance of the MIC Board of Directors.

"We are delighted to witness the culmination of efforts to fortify the MIC through enacting comprehensive and empowering rules," Tieng, sponsor of the MIF bill in the House of Representatives, said.

"The strengthened independence of the Board of Directors is fundamental in ensuring prudent and effective decision-making, safeguarding the corporation's integrity and promoting financial stability," he said.

The new IRR, Tieng argued, also aligns with the ongoing commitment to foster a resilient and progressive financial environment, reinforcing trust and confidence among stakeholders and investors.

Tieng, however, emphasized the significance of continuous vigilance and adaptability to navigate the ever-evolving financial landscape.

“Sustained collaboration and dedication are key to maintaining the integrity and stability of financial institutions, ultimately for the well-being of the Filipino populace,” Tieng said.

“This highlights the need for consistent efforts in safeguarding financial systems and ensuring they serve the people effectively,” he added.

Romualdez, Pangandaman

Speaker Ferdinand Martin Romualdez on Sunday welcomed the revised IRR of the MIF, saying that these would “protect and guarantee” against “political interference.”

Romualdez said the latest IRR would ensure that the MIF was “managed with the utmost transparency,” and that the autonomy of the MIC Board would provide for more “objective and effective decision-making.”

Department of Budget and Management Secretary Amenah Pangandaman likewise welcomed the release of the revised Maharlika Fund IRR.

"The President earlier assured that the members of the Maharlika Investment Corporation (MIC) Board, whose primary job is to rule and administer the MIC, its assets, and investments by law, will have the necessary freedom to oversee the fund without undue political interventions that will impede its fulfillment of functions," said Pangandaman in a Sunday statement.

"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. This will also improve accountability, openness, and efficacy in carrying out the law's provisions," she said.

Given this development, Pangandaman was confident that the MIF would be functional by the end of this year — on track and consistent with the timeline given earlier.

It was in July when President Ferdinand "Bongbong" Marcos Jr. signed into law the Maharlika Investment Fund Act.

"For the first time in the history of the Philippines, we now have a sovereign wealth fund designed to drive economic development," Marcos said.

"Through the fund we will leverage on a small fraction of the considerable but underutilized investable funds of the government and stimulate the economy without the disadvantage of adding additional fiscal and debt burden," he added. —Joviland Rita and Llanesca T. Panti/KG, GMA Integrated News