Purpose of the Fund. When the idea of setting up a sovereign wealth fund or SWF was first publicly floated, most investment market professionals and observers' initial reaction was incredulity. How could the Philippines, with no burgeoning surplus to speak of and saddled with significant debt, create a "wealth" fund? After all, countries with SWFs have been primarily resource-rich — with a few exceptions without natural resources, like Singapore, which has significant surpluses.

What could a SWF possibly achieve for the Philippines that other existing platforms couldn't handle? Indeed, the likes of GSIS, SSS, and even BSP already have a wide array of investments in domestic and foreign currencies in their portfolios.

During the Senate hearings on the draft bill, it became evident that the primary objective is to create a Strategic Investments Fund, a sub-class of SWFs, to promote economic development by attracting foreign equity investments in our various infrastructure projects. With the significant long-term capital required, clearly, the resources of our GFIs and even our local conglomerates would not be sufficient. It is hoped that the Maharlika Investment Fund or MIF will fill this funding gap.

Question of Governance. Another lingering question casting doubt on the prospects of the MIF is governance. More specifically, given the idea of creating a fund that can be used as a platform for attracting much-needed foreign investments into our country, what safeguards are in place to assure good governance of the MIF that can follow through and execute great ideas on paper? After all, isn't our history littered with the corpses of failed government agencies and interminable bureaucratic roadblocks in other infrastructure projects? So, how do we avoid a repeat of past missteps?

To ensure the highest level of governance standards, a board chaired by the Finance Secretary and composed of the CEOs of LandBank and DBP, a CEO with proven investment management performance, two regular directors, and three independent directors shall oversee the MIF.  In addition, the heads of key government economic agencies — Budget, NEDA, and Bureau of Treasury — will serve as its advisory body to guide development projects to prioritize and pursue.

With the eyes of all Pinoys on the lookout for any stumbles, I believe that the collective responsibilities of these esteemed advisory and board members — and with their reputations on the line — will ensure that the MIF will be managed professionally and to the best of their abilities.