12-11-2023 (MANILA) The office of the President of the Philippines has recently issued updated guidelines for the nation’s inaugural sovereign wealth fund, introducing key amendments that empower the president to accept or reject nominations from an advisory board for top officials.
In a move towards enhancing transparency and accountability, President Ferdinand Marcos Jr. temporarily halted the implementation of the Maharlika Investment Fund (MIF) last month. The revisions, as outlined by Rosalia de Leon, a central bank monetary board member and former treasurer involved in the review process, are designed to shield the fund from political influence. Marcos aims to provide flexibility in setting qualifications, ensuring the fund’s impartiality.
According to the revised rules, Marcos is granted authority to approve or disapprove nominees for president and chief executive officers, along with regular and independent members of the Maharlika Investment Corp. This entity will be responsible for overseeing the fund, as stated in the official release.
Finance Minister Benjamin Diokno disclosed during the Reuters NEXT conference in New York this week that the sovereign wealth fund is set to become fully operational by year-end, with an initial capitalization of approximately $2 billion.
As per the legislation governing the fund, it is authorised to issue up to 500 billion Philippine pesos ($8.96 billion) worth of preferred and common shares, available for purchase by the government, state-run enterprises, and banks.
The Philippines, compared to regional counterparts, is relatively tardy in establishing a sovereign wealth fund, with Indonesia launching its fund in 2021, and Singapore having had one for an extended period.
However, concerns linger among critics who fear potential misuse of the fund. The scandal surrounding the sovereign wealth fund of neighbouring Malaysia, 1Malaysia Development Berhad, involving multi-billion dollar graft, remains fresh in their minds.
