Congress approved on May 31, 2023 the Maharlika Investment Fund (MIF) Act of 2023. The House of Representatives adopted the Senate version of the bill. SB 2020 was passed on third reading with 19 affirmative votes, one negative vote, and one abstention.
“I thank our legislators for their thoughtful deliberation and timely approval of the Maharlika Investment Fund bill. The economic team is resolute in its commitment to ensure that the entity created will be able to generate returns that will redound to inclusive and sustainable economic growth,” Finance Secretary Benjamin E. Diokno said.
The MIF will be the Philippines’ first-ever sovereign wealth fund that will optimize national funds by generating returns to support the PBBM administration’s economic goals as set in the Medium-Term Fiscal Framework (MTFF), the 8-point Socioeconomic Agenda, and the Philippine Development Plan (PDP) 2023-2028.
The Fund will be invested in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, joint ventures, mergers and acquisitions, real estate and high-impact infrastructure projects, and projects that contribute to the attainment of sustainable development.
The establishment of the MIF will provide the government with a long-term source of income that will support generations to come. It will also ease the burden on the national budget by providing additional funding for other priority projects of the government.
Unlike other Government-Owned or -Controlled Corporations (GOCCs), the MIF will be able to maximize government assets through its investments in projects that generate bigger returns.
The Senate’s version of the bill addresses the issues concerning the MIF’s capitalization and management.
The final version of the bill explicitly prohibits government agencies and GOCCs that provide for social security and public health insurance (of government employees, private sector workers and employees, and other sectors and subsectors) to contribute to and invest in the Fund.
These include, but are not limited to, the Social Security System (SSS), Government Service Insurance System (GSIS), Philippine Health Insurance Corporation (PHILHEALTH), Home Development Mutual Fund (PAG-IBIG FUND), Overseas Workers Welfare Administration (OWWA), and Philippine Veterans Affairs Office (PVAO) pension fund.
An Audit Committee will be constituted by the Board of Directors to provide recommendations on the engagement of an external auditor. It will also oversee the internal and external audits mandated under the Act.
A Risk Management Committee composed of five (5) members will also be organized by the Board to ensure the Maharlika Investment Corporation (MIC)’s prudence in balancing risk and reward in both ongoing and new business activities.
Furthermore, the Commission on Audit (COA) shall conduct a special audit of the MIC’s books and accounts every five (5) years.
A Joint Congressional Oversight Committee (JCOC) composed of seven (7) members each from the House and the Senate will also be created to oversee, monitor, and evaluate the implementation of the Act. This also requires the MIC to submit all internal and external audit reports for each accounting period.
All MIF and MIC documents shall be open, available, and accessible to the public, as may be allowed by law, in both English and Filipino.
The implementing rules and regulations (IRR) will be promulgated within ninety (90) days from the effectivity of the Act by the Treasurer of the Philippines in consultation with the founding government financial institutions (GFIs).
“Congress’ timely passage of the Maharlika Investment Fund Act before the President’s second State of the Nation address speaks volumes of its commitment to see through the implementation of the administration’s goals,” Secretary Diokno said.