Congress OKs Maharlika fund bill; Zubiri lauds House for adopting Senate’s version

The Senate on Wednesday (May 31) approved the bicameral conference committee report on the controversial Maharlika Investment Fund (MIF) bill which President Ferdinand “Bongbong” Marcos Jr. has certified as urgent.

Senate President Juan Miguel Zubiri is thankful that the House of Representatives accepted the Senate version of the proposed MIF bill with all the safeguards that the Senate minority bloc wanted included.

A copy of the enrolled bill will now be transmitted to Malacañang for the President’s signature. Once signed into law, it will now pave the way for the establishment of the country’s first-ever sovereign wealth fund.

As far as he is concerned, Zubiri said the Senate’s version of the bill “can be defended at Plaza Miranda” in Quiapo, Manila, the site of traditional political meetings, due to the numerous safeguards they incorporated in the measure.

‘’Kasi sa dami ng safeguards pati ang minority (Because of the safeguards, revved the minority) admittedly of course they are against it and they voted against it but they were very happy that we accepted almost all the safeguards that possibly can be placed in this measure,’’ Zubiri told reporters in press conference.

The bicameral conference committee meeting was held at Manila Golf at Forbes Park, Makati, Wednesday, May 31. Rep. Irwin Tieng, chairman of the House panel, announced that they are adopting the Senate version.

Present during the 20-minute meeting was Zubiri, House Speaker Martin Romualdez, and Senator Mark Villar, chairman of the Senate banks committee and defended of the Senate MIF bill, and the Senate and House contingents.

‘’I was very happy that the safeguards were in place… that was my number one concern,’’ he told Senate reporters, adding that he is also thankful that senators crossed party lines during the debate and voting.

“And I’m thankful also to Sen. Mark Villar for a job well done at sa pagaccept nitong mga amendments na ito (and his acceptance of the many amendments),” he said.

Villar was at first skeptical of the amendments because the Marcos administration’s economic team might negatively react, according to Zubiri.

But after a dinner during a break with the economic team, Zubiri said ‘’we really reiterated to them that this Maharlika fund is not only for this administration it is for the next 10 administrations.’’

“I mean this will outlive us kasi (because) 35 years old itong kumpanya na to maharlika investment corporation (MIC)  so we wanted to make sure there are safeguards in place for possible abuse in the future at pumayag sila (and they accepted),’’ he explained.

‘’I think that was the number one clincher there na pumayag sila (that they accepted) and we that smooth sailing na,’’ he said.

“So accept na lang ng accept ng amendments si Senator Mark  (So Senator Mark just accepted the amendments) and we were able to proceed quicker during the amendments,’’ he added.

Villar, for his part, thanked his colleagues “both in the majority and minority for the amendments they presented, together we were able to craft a bill that will best benefit the Filipino people.”

The period of amendments for the Maharlika bill took about 12 hours before being passed on third reading having 19 affirmative votes, 1 negative and 1 abstention.

“We pushed for this bill not just for the economic gains that we can get but more so to solve our worsening problems in terms of poverty rate and unemployment. In line with the projections of our economic managers, the Maharlika will be able to generate 350,000 jobs,” Villar stressed.

In their version, Senate introduced major amendments to the measure, particularly 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.

Under the bill, the Maharlika Investment Corp. (MIC), the corporate body that would be created upon enactment of the measure into law, shall have an authorized capital stock of P500-billion to be divided into five (5) billion shares, with a par value of P100 (one hundred pesos) per share.

The share shall have the following classifications and features namely:

Common shares of P3.750-billion, equivalent to P375-billion to be subscribed by the national government, its agencies or instrumentalities, including government-owned and controlled corporations (GOCCs) or government financial institutions (GFIs): provided that P1.25-billion shares equivalent to P125-billion shall initially be subscribed from

Land Bank of the Philippines (Landbank)—P50-billion;

Development Bank of the Philippines (DBP)—P25-billion;

National Government—P50-billion

The Senate also accepted the amendments introduced by Senate deputy minority leader Sen. Risa Hontiveros providing that the MIC shall admit into its ranks  only those persons unblemished by any hint of corruption. The bill also includes stiff penalties against persons who perpetrate any corrupt acts.

Senators also moved to ensure that there would be a 25 percent limit to the investible funds of the DBP and the Land Bank that would be exposed to the operations of the Maharlika Fund.

The Upper Chamber also protected the financial strength of the Bangko Sentral ng Pilipinas (BSP). Under the Senate version of the measure, the 100 percent of the BSP’s total declared dividends, as computed under Republic Act 7653, also known as the New Cenral Bank Act, shall be remitted to the national government for the capitalization of the MIC in the amount not exceeding the P50-billion initial subscription of the national government.

Under the blll, the monetary board may recommend to the President of the Philippines the reduction of BSP’s dividend contribution to the MIC whenever economic conditions may warrant.

Also under the bill, the MIC will be mandated to

a) Establish a diversified portfolio of investments in the local and global financial  markets and in other assets that promote the objectives of the Fund;

b) Manage and invest the initial and future contributions to the Fund in accordance with this Act;

c) Accept and manage investment mandates whose investment purpose is to increase income for development goals;

d) Develop and foster skills in finance, economics, risk mitigation, good governance, and other related areas, consistent with the capacity and capabilities build-up of human resources in the industry; and,

e) Implement international best practices in investing and managing assets in accordance with the Santiago Principles and other internationally-accepted standards and principles of transparency and accountability.

Also under Article IV of the proposed Maharlika bill, the Board of Directors of the MIC may engage in the following investments:

• Cash, foreign currencies, metals, and other tradeable commodities;

• Fixed income instruments issued by sovereigns, quasi-sovereigns and supranationals;

• Domestic and foreign corporate bonds;

• Listed or unlisted equities, whether common, preferred, or hybrids;

• Islamic investments, such as Sukuk bonds;

• Joint Ventures or Co-Investments, MERGERS AND ACQUISITIONS;

• Mutual and Exchange-traded Funds invested in underlying assets;

• Real estate and infrastructure projects: provided that investments in infrastructure projects shall be directed towards the fulfillment of national priorities such as the Department of Public Works and Highway’s (DPWH) infrastructure program and other infrastructure agencies.

• Health, education, research and innovation programs and projects that contribute to the attainment of sustainable development.

• Loans and guarantees to, or participation into joint ventures or consortiums with Filipino and foreign investors, whether in the majority or minority position in commercial, industrial, mining, agricultural, housing, energy, and other enterprises, which may be necessary or contributory to the economic development of the country, or important to the public interest; and

• Other investments with sustainable and development impact aligned with Section 17 of the proposed Act, as may be approved by the Board.

Under the Senate version of the bill, all investment policies approved by the MIC Board shall be posted on its website, which shall be immediately updated and made easily accessible to the public.