This image shows a Philippine peso note dated June 2, 2017. — REUTERS/Thomas White/ILLUSTRATION
The House of Representatives approved the bill creating the Maharlika Investment Fund (MIF) on the third and final reading, just over two weeks after it was tabled by Speaker Ferdinand Martin G. Romualdez.
At Thursday’s session, 279 lawmakers voted in favor of the MIF bill, while six voted against. The six lawmakers who opposed the measure are Camarines Sur Rep. Gabriel H. Bordado, Jr., Gabriela Partylist Rep. Arlene D. Brosas, ACT Teachers Partylist Rep. France L. Castro, Albay Rep. Edcel C. Lagman, Kabataan Party List MP Raoul Danniel A. Manuel and Basilan MP Mujiv S. Hataman.
President Ferdinand R. Marcos, Jr. on Wednesday confirmed the MIF bill as urgent. This enabled the House to approve the measure at second and third readings on the same day, before being held over for the Christmas holidays.
In a December 14 letter to the Speaker, Mr Marcos said the immediate passage of House Bill (HB) No. 6608 was required “to establish a sustainable national investment fund as a strategic mechanism to strengthen the investment activities of top-performing government financial institutions (GFIs ) and thus boost economic growth and social development.”
Mr. Marcos signed the letter while in Brussels, Belgium, to attend the Association of Southeast Asian Nations-European Union (ASEAN-EU) Commemorative Summit.
Several lawmakers led by Mr. Romualdez, the president’s cousin, and Deputy Majority Leader Ferdinand Alexander Marcos, the president’s son, filed the bill creating the country’s sovereign wealth fund on Nov. 28.
A consolidated version, HB No. 6608, was approved by the House of Representatives Committees on Banks and Financial Intermediaries, Appropriations and Appropriations last week.
Lawmakers on Thursday agreed to include a provision in the bill that would prohibit the Government Service Insurance System (GSIS) and Social Security System (SSS) from contributing to the MIF and that 25% of Maharlika Investment’s profits corp (MIC) would be distributed as ayuda or monetary subsidies to vulnerable sectors.
The proposed MIF has been heavily criticized by economists, former cabinet officials, business groups and civil society organizations for lack of transparency and safeguards. They also expressed concern about the earlier version of the bill, which required state pension funds to put money into the MIF, prompting lawmakers to scrap that provision.
Treasury Secretary Benjamin E. Diokno has urged Mr. Marcos to certify the MIF bill as urgent because it would help create more jobs, boost trade and investment, fund infrastructure projects, and achieve food and energy security.
In the six-page memo to the President by Executive Secretary Lucas P. Bersamin, Mr. Diokno said the MIF could be a catalyst in transforming the economic landscape and helping the country realize its full potential.
“With professionals managing the investment of public funds, the MIC would ensure the availability of a high-yield alternative investment platform, achieve the best absolute return on funds, find additional sources of liquidity when needed, and better manage risk in the face of additional levels of checks and balances that it offers,” he said.
According to the approved version, initial funding for the MIF will come from Land Bank of the Philippines (P50bn), Development Bank of the Philippines (P25bn) and Bangko Sentral ng Pilipinas (BSP). BSP will initially pay 100% of its dividends to be declared as income into the MIF.
Subsequent annual contributions will be made from, among other things, GNP dividends and a portion of Philippine Amusement and Gaming Corp. gaming revenue. and other state gaming operators.
GNP Governor Felipe M. Medalla said Thursday that the central bank’s ability to maintain price stability “is not adversely affected by the current version[of the MIF law].”
“I think at times like this we should support the President… If this fund can be used to attract foreign investors… it could be good for the country.” And that’s why I support passing the bill because our concerns at the central bank have been fully addressed and criticism of pension fund involvement has also been addressed,” Mr Medalla told reporters on Thursday. – Beatriz Marie D. Cruz, John Victor D. Ordoñez with Keisha B. Ta-asan