Says MWF beneficial for PH, asks critics to wait for Congress’ final draft
President Ferdinand Marcos Jr. on Monday expressed his support for the creation of a multibillion-peso Maharlika Wealth Fund (MWF) and urged the public to let lawmakers come up with a “perfect” version of the bill before debating its features.
“For sure. I wouldn’t have brought it up otherwise,” Marcos said in an interview with reporters aboard a plane bound for Brussels, Belgium when asked if he thinks the fund will be beneficial for the country.
The creation of the MWF, a sovereign wealth fund, would provide additional investments for the country, the President said in a speech before going to Belgium to attend the ASEAN-EU Summit.
“It’s very clear that we need added investment. This is another way to get that,” the President said when asked if the start-up fund would be advantageous for the government.
This was the first time the President spoke in public about the fund, which some business groups and academics have criticized.
Mr. Marcos also allayed public fears over the possible misuse of government funds in the MWF. He said Congress was going through “the regular process” of working on the bill to create the fund.
“So let them do their jobs. That’s right, let them do it perfectly,” Mr. Marcos said.
“Let’s not debate until we see the final form because we could be debating about provisions that no longer exist. So, let’s wait what our legislatures will do,” he added.
Meanwhile, proponents of the proposed MWF have included in the measure penal provisions for individuals who will cause investment losses in the wealth fund.
“It will be an imprisonment of not less than a year but not more than five years or a fine of P50,000 to P2 million or both pursuant to the discretion of the court,” Manila Rep. Irwing Tieng, chairman of the House committee on banks and financial intermediaries, said.
The individuals include the director, trustee, or officer who willfully or maliciously violates investment policies and guidelines set by the Board of Directors pursuant to Section 19 of this Act, Tieng added.
The latest version also earmarks 20 percent of the fund’s income for social welfare programs, as proposed by Marikina Rep. Stella Quimbo, one of its authors.
Tieng meanwhile said the authors of the bill have agreed to adopt its initial name, the Maharlika Investments Fund (MIF), instead of the Maharlika Wealth Fund.
Senate President Juan Miguel Zubiri also said Monday that the President wants senators to seriously consider crafting a law that would create the MIF, with the end objective of livening up the country’s investment climate.
“He wants us to seriously take into consideration the Maharlika Wealth Fund,” Zubiri said. “I then told him, ‘Mr. President, as you know (as a former senator), we take a longer time (to craft a law) because we go through it like a fine-toothed comb.’”
“We will look at the House version, and of course, possibly add amendments to assuage the worries of our kababayans that there would be (fund) leakage, (or) corruption,” Zubiri added.
The Senate’s “general sentiment” is to wait for the final House version of the bill and check what will be its “safeguards,” the chamber’s President said.
Zubiri said the President did not ask him to “hasten” the Maharlika bill proceedings in the Senate. He is recommending including representatives from the Management Association of the Philippines and “economic geniuses” in the Maharlika fund board, if it ever becomes a law.
The Senate also wants a Commission on Audit access to the fund, as well as tapping a third-party auditor, the senator said.
Political leaders in the House of Representatives crossed party lines Monday to endorse the creation of the MIF.
Deputy Speaker and Pampanga 3rd District Rep. Aurelio Gonzales Jr. said he supports the planned creation of the sovereign wealth fund.
“We are all for the MIF proposal of the Speaker (Martin Romualdez). The objective of maximizing or optimizing gains from the investment of excess state funds or assets is laudable. That is what every nation on this planet would want to do,” Gonzales, who belongs to PDP-Laban, said.
San Jose del Monte City Rep. Florida P. Robes, another PDP-Laban stalwart, said the House intends to put enough safeguards in the MIF bill to prevent possible abuse, corruption, and dissipation of the funds.
“The proposal of Speaker Martin will be a big help to our country and to every Filipino,” Robes said.
Quezon Rep. Mark Enverga, one of the leaders in the House of the Nationalist People’s Coalition (NPC), said: “This proposal has become contentious, but it is important to recognize that the country needs the MIF to fund its needs.”
“So, we see the importance of this measure, and we support it, particularly for the reason that it will increase national revenues,” Enverga said.
Since the Maharlika Investment Fund was first proposed in the House of Representatives, the bill has already undergone several changes. The Government Service Insurance System (GSIS) and the Social Security System (SSS) were dropped as mandatory contributors to the fund, after their members questioned the wisdom and constitutionality of putting their pensions at risk.
Lawmakers have also removed a provision in the bill that makes the President the chairman of the board of directors, which they conceded could politicize the fund.
But the President maintained that the MIF will be a good investment vehicle to foster an improved environment for economic development in the country.
The authors of the proposed measure include House Speaker Ferdinand Martin Romualdez and Ilocos Norte 1st District Representative Ferdinand Alexander Marcos III, the cousin and son of the President, respectively.
Other authors were House Majority Leader Manuel Jose Dalipe, Senior Deputy Majority Leader Ferdinand Alexander Marcos, Tingog party-list Reps. Yedda Marie Romualdez and Jude Acidre, and Marikina City Rep. Stella Luz Quimbo.
Twelve business associations and economic policy groups have expressed concern over the fund, citing its lack of justification.
The groups echoed similar concerns voiced by Bangko Sentral ng Pilipinas Governor Felipe Medalla who flagged the potential impact on the dollar reserves.
Senator Imee Marcos also expressed misgivings that the fund could suffer the same fate as the 1Malaysia Development Berhad that was hounded by graft issues.
As the bill continued to draw criticism, the country’s economic managers, led by Finance Secretary Benjamin Diokno, said the MWF is expected to increase investments and the funding of infrastructure projects and countryside development, particularly in agriculture.
In a joint statement, they said in the near and medium term, the MWF is seen to enhance the country’s fiscal space and reduce fiscal pressures as the fund “pursue public infrastructure projects, as well as reduce uncertainties in cases when fund resources are channeled to high-yielding financial undertakings.”
They called for the immediate enactment of the bill creating the MIF as this will redound to growth and help the country achieve “economic transformation towards inclusivity and sustainability.”
“Let us not delay economic progress. Let us not deprive our people of this opportunity for prosperity,” they said.
The economic managers also said that with professionals managing the proposed MWF, there will be efficient use and management of these investible public funds.
Tieng explained, “the penal provisions also provide that the loss suffered by the Maharlika fund as a result of the acts of negligence, willful misconduct, fraud, and actions in breach of investment agreement will also be charged to the director, trustee, or officer who caused such losses.”
Romblon Lone District Rep. Eleandro Jesus Madrona, a Nacionalista Party leader, said investing government assets for optimum profit for their population is what 49 countries with sovereign wealth funds are doing.
“Our only intention really is to make our country prosperous because of this investment,” Madrona added.
Quezon City Rep. Marvin Rillo, a member of Lakas-Christian Muslim Democrats (CMD), said “the Philippines, in creating a sovereign wealth fund, should learn from the best practices of countries with successful investments and avoid the mistakes of others.”
Rep. Margarita Ignacia Nograles of the party-list group PBA said the House listened to the suggestions of the public on the proposed MIF by
adding safeguards against corruption, fraud, and other potential acts of wrongdoing.
“The most important of these are the penalty clauses or provisions. We want to avoid possible graft and corruption and scandals, which the public is afraid of. We want the penalties to be at par with those contained in the Corporation Code,” Nograles said.
She said another feature added to the bill is the earmarking of 20 percent of MIF profits for social projects.
“Again, this is the House leadership’s way of listening to the public,” she added.
Northern Samar Rep. Paul Daza, who belongs to the minority group, said he was inclined to support the MIF bill after the House leadership introduced improvements.