I wouldn’t have brought it up otherwise... It’s very clear that we need added investment. This is another way to get that
President Ferdinand R. Marcos Jr. and First Lady Liza Araneta-Marcos arriving in Brussels, Belgium for the three-day Association of Southeast Asian Nations-European Union Summit last | Photograph by MICHELLE R. GUILLANG for the daily tribune @tribunephl_mish
BRUSSELS — President Ferdinand "Bongbong" Marcos Jr. on Sunday broke his silence on the controversial Maharlika Investment Fund bill, defending the rationale for the proposed sovereign wealth fund.
Speaking to reporters on the presidential plane en route to the ASEAN-EU Summit in Belgium, Marcos said the Philippines needs more investments, which the Maharlika fund will facilitate.
"I wouldn't have brought it up otherwise… It's very clear that we need added investment. This is another way to get that," he said.
Marcos said the proposed measure is "for sure" advantageous to the Philippines, calling on the public to let lawmakers "do their job" to make the proposed measure "perfect."
The wealth fund bill has drawn criticism from top business groups, militant organizations, prominent economists, and the president's sister, Senator Imee Marcos.
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When asked about concerns about the timing of the filing of the bill, Marcos said the public must wait for the lower chamber of Congress to finalize the bill through hearings.
"Let's not debate until we see the final form, because we could be debating about provisions that will no longer exist. So, let us wait for what the legislature will do about it," said the president.
House Bill 6398 defines the MIF as an independent fund that adheres to the principles of good governance, transparency, and accountability.
Lawmakers are seeking to create an investment fund to allow the government to invest in foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects, among others.
The President's relatives, House Speaker Martin Romualdez and Ilocos Norte Rep. Sandro Marcos, led a group of lawmakers in filing the bill.
Other authors of the measure are House Majority Leader Mannix Dalipe, Tingog party-list Representatives Yedda Marie Romualdez and Jude Acidre and Marikina City Rep. Stella Luz A. Quimbo.
With the House of Representatives ruled by the President's strong allies, the proposed Maharlika fund bill has been fast-tracked, with the House committee on appropriations approving it last week.
According to Dalipe, the House leadership aims to pass the proposed measure on second reading before Congress goes on a holiday break.
Romualdez said MIF is patterned after the sovereign wealth funds of 49 countries, including China, South Korea, Singapore and Vietnam.
The MIF bill received backlash after lawmakers proposed that state pension funds Government Service Insurance System and Social Security System as mandatory contributors to the proposed sovereign wealth fund.
Hence, the bill's authors decided to remove SSS and GSIS as contributors for the proposed wealth fund, which they aimed to "become an investment vehicle where existing surplus capital of the government can grow and reap benefits," according to Quimbo.
Before the President's public statement regarding the proposed sovereign wealth fund, Marcos's economic managers jointly expressed their approval of the bill.
The country's economic team, led by Finance Secretary Benjamin Diokno, is optimistic that MIF would increase investments and the funding of infrastructure projects and countryside development.
Calling the MIF a "tried and tested investment vehicle," they expressed confidence that it would improve the country's fiscal space.
The economic team cited the model of the Indonesia Investment Authority, which it said has been a "successful model of a sovereign wealth fund" that was able to finance the country's big-ticket infrastructure projects even during the height of the Covid-19 crisis.
For Singapore, meanwhile, the economic managers said the investment gains from the Government of Singapore Investment Corporation, the central bank, and state investor Temasek Holdings Pte have been the biggest contributors to the national budget since 2018.
However, while several countries were able to successfully invest their sovereign wealth fund, the case of former Malaysian Prime Minister NajibRazak is infamously known to the financial world for money laundering.
House introduces changes
Proponents of the controversial bill seeking to establish a sovereign wealth fund have come up with a new set of amendments, including reverting its name to Maharlika Investment Fund and a penal provision for those who commit gross negligence or anything that will cause investment losses in the fund.
On Monday, House committee on banks and financial intermediaries chairperson Irwin Tieng said that his panel approved such amendments, including awarding at least one-fifth of the fund's net profits to social welfare projects, among others.
He told reporters that Albay Rep. Joey Salceda, chairperson of the House Ways and Means Committee, added penal provisions for directors, trustees, and officers who willfully or maliciously violate investment policies and guidelines established by the Board of Directors in accordance with Section 19 of this Act.
"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," Tieng said.
"Stockholders or members and other persons shall be punished by imprisonment of not less than one year but not more than five years, or a fine of not less than P50,000 but not more than P2 million, or both at the discretion of the court," Tieng said, as he read the amended bill.
The penal provisions also state that any losses incurred by the Maharlika fund as a result of negligence, willful misconduct, fraud or actions in violation of the investment agreement will be charged to the director, trustee, or officer who caused such losses, according to the solon.
He also disclosed that the bill's authors had already decided to call it MIF, rather than the Maharlika Wealth Fund.
To recall, Tieng's panel approved House Bill 6398 on 1 December, just two days after it was filed by Speaker Martin Romualdez, his nephew and the President's son, Ilocos Norte Rep. Sandro Marcos, and other administration allies.
Earlier, proponents of the proposed legislation seeking to create a P275-billion sovereign wealth fund, first dropped the two major state pension funding sources Government Service Insurance System and the Social Security System, as mandatory contributors in the wake of public backlash saying it could jeopardize contributors' and pensioners' retirement funds.
The House appropriations panel on Friday's hearing, also included another provision, with the Secretary of Finance taking over as chair of the board in place of the President.
The amendments came following public backlash and opposition from various business groups, civil society and even lawmakers, including Senator Imee Marcos, the President's sister.
