Marcos suspends Maharlika fund implementation

President Ferdinand "Bongbong" Marcos Jr. has directed the suspension of the enforcement of the implementing rules and regulations of the Maharlika Investment Fund (MIF) pending further study.

GMA News Online obtained a copy of the memorandum, dated October 12, 2023, that was signed by Executive Secretary Lucas Bersamin by authority of Marcos.

The memorandum was addressed to Bureau of Treasury officer-in-charge Sharon Almanza, Land Bank of the Philippines president and CEO Lynette Ortiz, and Development Bank of the Philippines president and CEO Michael de Jesus.

"With reference to the IRR of RA No. 11394, and upon the directive of the President, the Treasurer of the Philippines, in coordination with the LBP and DBP, is hereby DIRECTED to suspend the implementation of the IRR of RA No. 11954 pending further study thereof, and to notify all concerned heads of departments, bureaus, offices and other agencies of the executive department, including GOCCs, of such action," the memorandum read.

The suspension was also confirmed by De Jesus to GMA News Online on Wednesday.

"Memo directed the Treasurer to suspend implementation of the IRR pending further study," De Jesus said in a message.

The Office of the Executive Secretary said that Marcos wants to study the IRR to guarantee that the fund will have safeguards for transparency and accountability.

"President Ferdinand R. Marcos Jr. issued a suspension because he wanted to study carefully the IRR to ensure that the purpose of the fund will be realized for the country's development with safeguards in place for transparency and accountability," the OES said in a brief statement.

The IRR, which would spell the beginning of MIF's operationalization, was released in August.

Marcos signed into law Republic Act No. 11954 or the Maharlika Investment Fund (MIF) Act of 2023 in July, with the aim to tap state assets for investment ventures to generate additional public funds.

The law creates the Maharlika Investment Corp. (MIC), a government-owned company that will manage the MIF — a pool of funds sourced from state-run financial institutions that will be invested in high-impact projects, real estate, as well as in financial instruments.

Last month, De Jesus said the DBP remitted to the Bureau of Treasury (BTr) its mandatory contribution for the initial capital of the MIF, which is the country’s very first sovereign wealth fund.

“Yes, we remitted P25 [billion] to BTR today,” De Jesus had said.

Under the law, the initial capitalization of the MIF would be sourced from Landbank at P50 billion, DBP at P25 billion, and the national government at P50 billion.

The contribution from the national government will come from the following sources:

• Bangko Sentral ng Pilipinas' total declared dividends
• National government's share from the income of PAGCOR
• Properties, real and personal identified by the DOF-Privatization and Management Office
• Other sources such as royalties and/or special assessments

Under the law, the MIF has an authorized capital stock of P500 billion.

'Very good development'

Senate Minority Leader Aquilino "Koko" Pimentel III, who has challenged the legality of the MIF law before the Supreme Court, described the suspension of the implementation as a "very good development."

"Very good development. The law has a lot of defects. The concept has not been fully studied from the very start. Hence we should not wonder why apparently the law is not ready for implementation," Pimentel said in a text message to reporters.

"Good that the Marcos administration appears to listen to reason," he added. 

'Don't overthink this'

For his part, Albay Representative Joey Salceda, who chairs the House Committee on Ways and  Means, said the temporary suspension of the implementation of the Maharlika law is just a matter of exercising due diligence.

"The IRR should anticipate future issues. If he sees issues in the Executive branch’s IRR draft, he can resolve them. Better to do so before full implementation," Salceda said.

"Don't overthink this. It’s the Executive Branch working things among themselves," he added.

Salceda said he will provide advice to the Executive branch on the legislative branch's intent. 

House Deputy Speaker and former President Gloria Arroyo echoed Salceda’s position that there is wisdom in such suspension.

“The President must have his reasons and I trust his instincts on this. There's nothing to lose if we support the President on the suspension, as he deems appropriate,” Arroyo said.

“As a member of Congress, what I want to say is the President must have his reasons and we trust him,” she added when asked if such suspension will affect the goals of Maharlika law to make high-yielding investments to increase public funds.—with reports from Ted Cordero and Llanesca T. Panti/KBK, GMA Integrated News