Senate passes Maharlika Investment Fund bill

The Senate approved on early Wednesday on third and final reading the bill seeking to establish the Maharlika Investment Fund (MIF), a sovereign wealth fund that the government can use to make investments.

A total of 19 senators voted in favor of the bill, while Senator Risa Hontiveros objected to it.  Senator Nancy Binay abstained from voting.

JUST IN: Voting 19-1-1, Senate approves on third and final reading the proposed Maharlika Investment Fund Act of 2023 @gmanewsbreaking @gmanews

— Hana Bordey (@HanaBordey) May 30, 2023

The marathon discussions that took more than 12 hours ended at around 2:30 a.m.

A bicameral conference committee meeting is set at 11 a.m. Wednesday to harmonize the versions of the bill of the Senate (SB 2020) and the House of Representatives (HB 6608).

The Senate delegation to the bicam will be composed of Senators Mark Villar, Pia Cayetano, Bato dela Rosa, Sherwin Gatchalian, Francis Tolentino, Pia Cayetano and Aquilino "Koko" Pimentel III.

The measure was earlier certified as urgent by President Ferdinand Marcos Jr., which speeds up the process of approval in both chambers.

According to the bill, the MIF will be created through the funds which will be sourced from:

• Land Bank of the Philippines (LBP): P50 billion
• Development Bank of the Philippines (DBP): P25 billion
• National Government: 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

Among the major amendments introduced to the measure was the absolute prohibition of the use of funds of the Government Service Insurance System (GSIS), Social Security System (SSS), Philippine Health Insurance (PhilHealth) corporation, Pag-IBIG, Overseas Workers Welfare Administration (OWWA), Philippines Veterans Affairs Office (PVAO)  in the capitalization and investments in the Maharlika fund.

“The rationale for this as many of our colleague including this representation has manifested on the floor in as much as we truly hope that the fund will be successful, we would like to ensure that the pension fund and aforementioned funds would not be touched to at least preserve this because we have experienced in the past the hard-earned money of our people were lost,” Cayetano said during the Senate session.

The increase in capitalization of the Maharlika Investment Corporation which will manage the MIF will also be subject to Congress' approval.

The MIC board of directors will be composed of the Secretary of Finance as chairperson in an ex-officio capacity; president and chief executive officer of the MIC as vice chairperson; president and CEO of LBP; resident and CEO of the DBP; two regular directors; and three independent directors from the private sector.

“Provided that in case of a merger, consolidation, or abolition of any founding GFIs (government financial institutions), the seat on the board of the absorbed, dissolved or abolished GFIs shall be filled by the next highest ranking officer of the GFI who has assumed the rights of the absorbed, dissolved, or abolished GFIs,” the amendment of Section 20 of the Senate Bill 2020 stated.

The measure also stated that regular directors shall be appointed by the President upon recommendation of the advisory board for a term of three years. However, in case of removal or resignation, the appointment to any vacancy shall only be for the unexpired term of the predecessor.

It said that the appointment of a regular director to fill such vacancy shall be in accordance with the manner provided for regular nomination, shortlisting, and appointment of regular directors.

Meanwhile, the bill also prohibited the appointment of MIC members with pending judicial and administrative cases related to fraud, plunder, corrupt practices, money-laundering, tax evasion, or any similar crimes involving misuse of money or breach of trust.

The proposed bill likewise stated that “as any person, natural or judicial, who allows itself to be used for fraud, or for committing or concealing graft and corrupt practices — by the directors, officers, or other employees of the MIC — as defined under pertinent laws, rules, and regulations shall be liable for a fine ranging from P1 million to P5 million, perpetual disqualification from public office, and imprisonment of six years.”

Under the measure, an oversight panel composed of seven members each from the two chambers of Congress will be formed to oversee, monitor, and evaluate the implementation of the proposed law.

The MIF-Joint Congressional Oversight Committee (JCOC) will be co-chaired by the chairpersons of the House Committee on Banks and Financial Intermediaries, and the Senate Committee on Banks, Financial Institutions, and Currencies.

Further, all documents related to the proposed bill and the Maharlika Investment Corporation will be easily accessible to the public and will be provided with Filipino translations to promote transparency.—LDF, GMA Integrated News