Maharlika Corp. board of directors named by November —Pangandaman

Despite the ongoing review of the implementing rules and regulations (IRR) of the Maharlika Investment Fund (MIF) Act, the board of directors of the government-owned company that will manage the sovereign wealth fund will be named next month.

Assuming the review will be finished “in two weeks time,” by November, “I think we will have a complete board and head of Maharlika,'' Budget Secretary Amenah Pangandaman told reporters on Friday. 

“By December, they can conduct their first organizational meeting… and by January, it will be full blast,” she said.

In a memorandum dated October 12, 2023, signed by Executive Secretary Lucas Bersamin by authority of President Ferdinand Marcos Jr., the Bureau of the Treasury, Land Bank of the Philippines, and Development Bank of the Philippines were directed to suspend the implementation of the IRR of Republic Act 11954 or the MIF Act, pending further study.

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

On October 19, Marcos clarified that the MIF was not put on hold and that the government is “still committed to having it operational by the end of the year."

Finance Secretary Benjamin Diokno, the chief architect of the MIF, has repeatedly said the sovereign wealth fund will be fully operational by the end of 2023, meaning that the Maharlika Investment Corp. (MIC) Board has already conducted its first meeting to plan its investment activities.

The Finance chief also said that the MIC is expected to begin its investment activities in the first quarter of 2024 after it secured initial capital from Landbank, DBP, and the Bangko Sentral ng Pilipinas.

Marcos signed the Maharlika Investment Fund Act of 2023 in July, with the aim of tapping state assets for investment ventures to generate additional public funds.

The law creates the 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, and financial instruments.

The MIC’s Board of Directors would be composed of the Finance Secretary, who will serve as the ex-officio chairperson; the presidents of Landbank and DBP; two regular directors; and three independent directors from the private sector.

Pangandaman said the review of the MIF’s IRR is undergoing “finalization” and “we will present it to the President soon.”

She was asked if the provision up for revision is Section 23 of the IRR, which apparently limits the President’s choices on who can be appointed to the MIC’s Board of Directors.

Section 23 of the MIF law’s implementing rules states that regular directors of the MIC “shall be appointed by the President upon recommendation of the Advisory Body.”

In response, Pangandaman said, “I think even if not [in the list]… the President can still choose the members, directors, and CEO of Maharlika.”

However, she said that details will emerge once the review is finished.

The Treasury had earlier said the Advisory Body had submitted its shortlist of candidates for the MIC’s Board of Directors to the OP.

Pangandaman is part of the MIF’s Advisory Body, along with the Secretary of the National Economic and Development Authority (NEDA) and the Treasurer of the Philippines.

The IRR of the MIF lists the qualifications of those who will form the MIF as well as the forms of investments that the MIC can invest in.

The MIC is authorized to invest in a wide range of products, activities, and projects, such as cash and other tradable commodities; fixed income instruments issued by sovereigns; domestic and foreign corporate bonds; listed or unlisted equities; and Islamic investments, such as Sukuk bonds, among others.

The IRR also provides lists of penalties to be imposed in order “to ensure the integrity of the Fund,” such as the imposition of heavy fines ranging from P1 million to P15 million and imprisonment of six to 20 years for various offenses, such as willfully holding office while in possession of any disqualification; knowingly certifying the corporation’s financial statements despite their gross incompleteness or inaccuracy; willingly allowing oneself to be used for fraud; and failure to sanction, report, or file appropriate action for graft and corrupt practices. —VBL, GMA Integrated News