Maharlika Fund transparent, won’t be like 1MDB — Diokno

Finance Secretary Benjamin Diokno defended Friday the proposed Maharlika Wealth Fund, saying it has transparency and accountability safeguard to prevent it from suffering the same fate as Malaysia’ corruption-riddled 1Malaysia Development Berhad (1MDB).

At a press briefing in Manila, Diokno said it is “unfortunate” that the critics of the Maharlika Wealth Fund cited the 1MDB, which he said had a sole signatory —former Prime Minister Najib Razak.

“He is the only signatory… so there are no safeguards,” the Finance chief said.

Senator Imee Marcos earlier expressed fear over the proposed sovereign wealth fund as it might be the next 1MDB.

Razak is serving a 12-year jail sentence for corruption in the 1MDB financial scandal.

Comparing the Maharlika Wealth Fund and 1MDB, Diokno said that “in this particular formulation… there are many layers.”

“There are many layers of audits, we have an internal auditor, we have an international auditor, and then we have COA (Commission on Audit),” the Finance chief said.

Diokno added that the proposed sovereign wealth fund has a “congressional oversight committee consisting of five members of the Senate and five members of the House to oversee the implementation of the fund.”

“We want to make sure that this is on the level, transparent, there’s accountability, there’s a published report, we submit a report to the President. And this will be published so we can be sure that the (Filipino) people would know where that money is going," he said.

In her opening statement during a House hearing, Appropriations panel senior vice chairperson Stella Quimbo allayed fears that the Philippines will follow 1MDB.

"In a situation where high rewards are likely, we also need to manage risks. Ito naman ang dahilan kaya maraming safeguards sa batas. Natuto na tayo sa Malaysia kung saan isa lang ang signatory at sisiguraduhin natin na hindi tayo matutulad sa kanila [This is why we have many safeguards. We've learned from Malaysia which only had one signatory and we will make sure we won't go the same route]," the House leader said.

Among the safeguards that they will include in the measure are:

•     Tasking the Boards of Directors to engage an internal and an external auditor
•     The books and accounts of the fund are within the ambit of the powers of the Commission on Audit
•     Creation of Joint Congressional Oversight Committee to monitor the implementation
•     Report to the president on the investment performance
•     Members of the board should be an expert of corporate governance or investments
•     Setting of a risk management unit to ensure that the corporation is achieving a prudent balance between risk and rewards
•     Setting of cap on administrative and operating expenses at two percent of its initial capitalization

"This investment vehicle will ensure that the government is able to maximize returns to investments of funds that are not currently needed by GFIs and GOCCs. These additional investment returns can be used to augment the national budget to fund our ever growing needs as a nation," she said.—AOL, GMA Integrated News