Despite being in the legislative mill in the House of Representatives for a total of just 18 calendar days, the proposed Maharlika Investment Fund (MIF) underwent a lot of revisions and fine-tuning.
In fact, the measure, embodied in House Bill (HB) No.6608, received numerous amendments--21 in all--during the period of individual amendments from congressmen. This preceded the bill's approval of second reading, and subsequently on third and final reading, on Thursday, Dec. 15.
What better person to discuss the last-minute amendments made to the proposed Philippine sovereign wealth fund than one of its most vocal proponents and defenders, Albay 2nd district Rep. Joey Salceda.
Here, in his own words, are the shorthand version of these 21 amendments:
1.On the declaration of policy, we included to “foster technological transformation”.
2.On funding sources, we clarified that what will come from the BSP (Bangko Sentral ng Pilipinas) is “declared dividends” to prevent the use of funds needed for operations.
3.On the objectives, we emphasized that the main object of the fund is “to promote economic development by making strategic and profitable investments in key sectors”.
4.On the general framework of the , we required that the board formulate ethical standards, and that the MIF will be covered by “ethical standards under the Securities Regulation Code, and ethical standards set by the International Organization of Securities Commissions (IOSCO) and other significant international organizations of investment entities”
5.We also clarified that “the provisions of Republic Act (RA) No. 8799 or Securities Regulation Code, RA No. 8791 or the general banking law, RA No. 2629 or the investment company act, their respective implementing rules and regulations, and other relevant laws, rules, regulations, and issuances by regulating authorities governing transactions with and among directors, officers, stockholders and related interests shall apply to the MIC"
6.We also removed the power of the MIC (Maharlika Investment Corporation) to condone debts owed it
7.To ensure that usual fiscal rules apply, we inserted the proviso that “all other instruments of mic shall be subject to laws, rules, and regulations on the contracting of debt and issuance of guarantees by GFIs (government financial institutions)”
8.We deleted the provision allowing the BSP to invest part of its surplus
9.On the mandatory review by the SOF (Secretary of Finance), we included a review of “the financial condition of investing GFIs”
10.Pension funds are also explicitly excluded from GFIs that may invest in the
11.We inserted a provision that the board will set targets to reduce expenses below the 2 percent cap
We included a new section on prohibited investments. These are
a.activities and investments related to, and entities with a record of commission of human rights violations, including but not limited to indigenous peoples, farmers, fisherfolk, and labor;
b.activities and investments related to, and corporations involved in the production of cluster munitions, nuclear arms, intercontinental ballistic missiles, and similar technologies and equipment;
c.activities and investments resulting in, corporations with a record of serious degredation of the environment; and
d.similar activities, investments and corporations
READ THIS TOO:
12.We inserted a paragraph that the investment policy will prioritize government infrastructure and development projects
13.We increased the number of independent directors to five out of 15 (one-third, consistent with corporate good governance principles)
14.Consistent with good corporate governance, the board will constitute an audit committee which will recommend the external auditor to be confirmed in the annual general shareholders’ meeting
15.While professional and technical services are exempt from the Procurement Law, we inserted a qualifier that the procurement of such shall still undergo competitive selection
16.Secondment of GFI employees to the MIF is limited to five years, to maintain the independence of the MIF from their owners, consistent with the Santiago Principles
17.Adopting the recommendation of the minority, we increased the remittance to the NG (national government) for social projects from 20 percent to 25 percent. But the remittance shall not exceed the share of total contributions of the NG to the fund
18.The external auditor will be engaged annually instead of for a three-year term, consistent with good corporate governance rules
19.We adopted the recommendation of the Makabayan bloc for a right to freedom of information for all relevant financial information on the MIF
20.We inserted a new section requiring an annual audit for compliance with the Santiago Principles. This is also a requirement under the Principles.
21.We also expanded penal provisions for a broader set of offenses, including collusion, intermediation for and tolerance of graft and corrupt practices, and retaliation against whistleblowers.
Thursday was the House's last session day for 2022.