PBBM says sovereign fund design must support critical infra projects
The Palace will now look at the structure of the Maharlika Investment Fund (MIF) bill passed by Congress on Wednesday before it is signed into law to ensure that “necessary infrastructure” projects, including energy development goals, would be funded by proceeds of the fund.
“It’s so that we, the Philippines, can participate in what would be, what is regarded, of course, as an investment for us. It is necessary infrastructure that we are investing in (through the MIF),” President Ferdinand Marcos Jr. said Thursday.
“So, that is the plan for the sovereign fund. We now have to go and look at the design or the structuring of the fund. But it is basically seen as our government participation in projects that, mostly, it will really be in the Philippines,” he added.
This developed as the Japan Bank for International Cooperation (JBIC) expressed interest in investing in the Maharlika Fund as it seeks partnerships with Philippine companies for energy development.
JBIC Chairman of the Board Tadashi Maeda expressed this during a courtesy call on President Marcos in Malacañang on Wednesday.
For his part, Senate Minority Leader Aquilino “Koko” Pimentel Ill said once the measure becomes a law, it can be challenged before the Supreme Court.
Pimentel also guaranteed to help anybody who will go to court and question the investment fund.
“For those planning to do this, I will make myself available as source of some facts, information and arguments,” he said.
For the JBIC, Maeda said they are interested in addressing the role of liquified natural gas (LNG) as a traditional source of power in the country, and the need to bring in other energy sources such as hydropower, solar, and wind.
“We have the potential…between Japan and the Philippines to work together,” he said.
“For example, I already had a meeting with Aboitiz (Corp.) Chairman Sabin (Aboitiz) and I proposed to him to have an MOU… and to Metro Pacific, and also to San Miguel,” Maeda added.
He said there is a need to identify the specific project and determine how to switch to more efficient energy, as well as the development of new technology like hydrogen.
The JBIC chair also congratulated the Philippine government for the approval of the proposed sovereign wealth fund law by both Houses of Congress.
President Marcos said these are the kinds of investments the country needs, which is why the fund is being created.
Maeda said the JBIC also wants to know more details about the country’s potential, targeted projects, and those still in the pipeline so it could make more tangible, specific proposals to upgrade the value of the strategic cooperation.
In the Senate during the deliberations of the controversial measure, Pimentel raised several concerns over the MIF, including its economic viability.
Pimentel, Sen. Imee Marcos, and Sen. Francis Escudero did not cast their votes during the third and final reading of the MIF.
But Senate President Juan Miguel Zubiri said the MIF is “Mission Impossible Fund” no more.
“The version of the measure that we have approved meets the high bar for transparency and accountability. The many amendments that we placed here will assure the Filipino people that this fund will be used properly, efficiently, and effectively,” said Zubiri.
This stand was echoed by the administration’s economic managers, who said the Senate version of the MIF bill eventually adopted by the House of Representatives has more safeguards against potential abuse and is also “more acceptable to everyone.”
Zubiri said the MIF, as finetuned by the Senate, will “attract investments, impose integrity safeguards, and yield gains for social good.”
“We are going to make the MIF work for the country,” Zubiri promised. “And I am very proud of this version because of the safeguards we put in place. No need to worry.”
The ratified version details strict safeguards for the selection of officers, for which there will be a rigorous vetting process, and introduces lengthy penal provisions to guard against the misuse of funds.
Hefty fines and penalties, including perpetual disqualification from public office, will be imposed on officers who commit prohibited acts, or conceal or tolerate graft and corrupt practices.
Sen. Ronald “Bato” dela Rosa expressed faith in the Marcos administration’s genuine intent in pushing for the establishment of the Maharlika fund.
“Malacanang will not do that if it will destroy our country. Who is a president or for that matter, an administration who will do measures to destroy the future of his country?” said Dela Rosa.
He said that some of his colleagues in the Senate just have their concerns, but he believes it’s fit the good of our country.
“So let’s work for the betterment of our country,” Dela Rosa said.
His proposal to prohibit the use of government social welfare entities such as the Social Security System (SSS) and the Government Service Insurance System (GSIS) to invest in the Maharlika was adopted in Congress’ final version of the bill.
For her part, Sen. Grace Poe said the bill passed is an enhanced, better version with adequate safeguards to ensure effective and transparent governance of funds.
“We pushed to include the requirement of a fidelity bond worth P10 million for the board members of the Maharlika Investment Corporation to guarantee that they will faithfully account for the funds entrusted to them,” she said.
“As an added protection of the fund, we increased the fines, imposed imprisonment and included perpetual disqualification from public office as part of penalties against officials who will tolerate graft, act as intermediaries for corrupt acts, and those who will be found erring during fund audits.”
“We also strengthened congressional oversight over the fund by requiring the quarterly submission of investment portfolio and audit reports,” she added.
According to the senator, they put premium on the public’s right to freedom of information by giving them access to investment plans for the fund and to audit its documents.