As expected by many, the House of Representatives approved on third and final reading on Thursday night the proposed Maharlika Investment Fund (MIF), which, if enacted, will serve as the Philippine sovereign wealth fund.
The proposed MIF, embodied in House Bill (HB) No.6608, gained 279 affirmative votes during nominal voting. Six voted in the negative, while nobody abstained.
House Speaker and Leyte 1st district Rep. Martin Romualdez, the presiding officer during Thursday's plenary session, declared HB No.6608 approved on third reading, which represents the chamber’s final nod to the measure.
Just three hours earlier in the session, the congressmen approved the planned sovereign wealth fund on second reading.
The solons were able to go ahead with the bill's third reading passage after the House leadership received from Malacañang earlier Thursday a document certifying the particular bill as urgent. "Urgent" bills not need go through the three-day wait period between second and third reading.
A controversial bill ever since it was initially filed in the current 19th Congress last Nov. 28, the measure has been under debate on the floor since Monday, Dec. 12.
Manila 5th district Rep. Irwin Tieng, chairman of the Committee on Banks and Financial Intermediaries--the mother committee of HB No.6608--sponsored and defended the measure for the most part. Most of the interpellators have been from the minority bloc.
In the past couple of days, Romualdez---one of the prime movers of the MIF--has been highlighting the swelling number of co-authors of the measure. As of 4:15 p.m. Thursday, a total of 280 solons---just under 90 percent of the House membership--has affixed their signature to the bill.
For Thursday's session, Romualdez flew in from Brussels, Belgium where he joined President Ferdinand "Bongbong" Marcos Jr. in the European Union-Association of Southeast Asian Nations (EU-ASEAN) Summit.
At its core, the proposed MIF is a pool of money--investible funds--that the State may grow profits from, ideally large enough that it could fill in the county's financial gaps that the annual legislated budget never could. It is patterned after the sovereign wealth fund of other countries, including our ASEAN neighbors.
Thursday was the last session date of the year. The House won't convene again until Jan. 23.
Exhaustive deliberations
The House leadership said that there has been exhaustive floor deliberations on the measure----including nearly three hours of interpellation conducted Wednesday night by indepednent minority solon Albay 1st district Rep. Edcel Lagman.
Just prior to HB No.6608's second reading-passage Thursday, the bill sponsor rather generously accepted approximately 20 individual amendments from House members, again mostly from the minority.
Romualdez, the principal author of the bill, said the amendments introduced to the measure, especially the inclusion of more safeguards against possible abuse and fraud, “is our way of addressing the concerns of our people".
“The proposed sovereign wealth fund will help President Ferdinand Marcos Jr. keep the country on the high-growth path. We want to assure the public that the management of the fund will follow best practices and the principles of transparency and accountability,” he said.
He said the bill, as finalized, would insulate the MIF from political influence.
As revised, the proposed law lists the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP), Philippine Gaming and Amusement Corp. (Pagcor), and Bangko Sentral ng Pilipinas (BSP) as MIF contributors.
Pension agencies Government Service Insurance System (GSIS) and Social Security System (SSS) will no longer be tapped for the seed money, as per the Speaker’s instructions.
Thei nitial contributions are P50 billion for LBP, P25 billion for DBP, and the 100 percent of declared dividends the BSP will give the national government. Meanwhile, Pagcor’s share will be 10 percent of gross gaming revenues.
Maharlika Investment Fund Corporation
The bill creates the Maharlika Investment Fund Corporation (MIC), which will manage the fund. The MIC Board of Directors will be chaired by the Department of Finance (DOF) secretary, and no longer the President of the Philippines as indicated in the initial iterations of the bill.
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The MIC will have an advisory body composed of the secretary of the Department of Budget and Management (DBM), director general of the National Economic and Development Authority (NEDA), and the National Treasurer.
The body’s tasks include advising and assisting the board of directors in formulating general policies on investment and risk management. The MIC will also have an internal and an external auditor, aside from being subjected to examination by the Commission on Audit (COA).
The bill lists “allowable investments,” like foreign currencies, metals, fixed-income instruments, domestic and foreign corporate bonds, equities, real estate, infrastructure projects, loans and guarantees, and joint ventures or co-investments.
The measure prescribes a graduated scheme of fines as penalty for various offenses such as internal auditor collusion, acting as intermediaries for graft and corrupt practices and engaging in graft and corrupt acts, ranging from P80,000 to P5 million.
Violations of any of the other provisions of the law or its amendments not specifically penalized therein shall be punished with imprisonment of not less than 6 years, but not more than 20 years, and by a fine of not less than P1 million to P3 million but not more than twice the value of the monetary instrument or property involved in the offense.
The proposed law mandates the National Treasurer, in consultation with the founding government financial institutions, to issue implementing rules and regulations.