Maharlika Investment Fund

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Maharlika Investment Fund
TypeSovereign wealth fund
FoundedN/A (proposed)
Area served
Philippines

The Maharlika Investment Fund (MIF), also known as the Maharlika Wealth Fund (MWF), is a proposed sovereign wealth fund for the Philippines.

Background[edit]

Legislative process[edit]

Maharlika Investment Fund Act
Coat of arms of the Philippines.svg
Congress of the Philippines
  • An Act Establishing the Maharlika Investment Fund, Providing for the Management, Investment, and Use of the Proceeds of The Fund, and Appropriating Funds Therefor
Passed byHouse of Representatives of the Philippines
PassedDecember 15, 2022
Passed bySenate of the Philippines
PassedMay 31, 2023
Legislative history
First chamber: House of Representatives of the Philippines
Bill citationH. No. 6608, 19th Cong. 1st Sess.
Bill published onDecember 12, 2022
First readingDecember 12, 2022
Second readingDecember 15, 2022
Third readingDecember 15, 2022
Voting summary
  • 279 voted for
  • 6 voted against
  • None abstained
Second chamber: Senate of the Philippines
Bill citationS. No. 2020, 19th Cong., 1st Sess.
Second readingMay 30, 2023
Third readingMay 30, 2023
Voting summary
  • 19 voted for
  • 1 voted against
  • 1 abstained
  • 3 absent
Status: Pending

In late November 2022, seven lawmakers in the Philippine House of Representatives, including Martin Romualdez and Sandro Marcos, filed House Bill 6398[a] proposing the creation of a sovereign wealth fund for the Philippines to be known as the Maharlika Wealth Fund (MWF). The fund, if established, would be managed by the Maharlika Investments Corporation (MIC).[2][3] President Bongbong Marcos has backed the establishment of a sovereign wealth fund, believing that it would be advantageous for the country.[4][5]

After President Marcos certified the bill as urgent, it was passed on its third reading in the lower house, with 279 lawmakers voting in favor of passing the bill.[6] Only six lawmakers voted against: Gabriel Bordado of Camarines Sur 3rd District, Arlene Brosas of Gabriela party list, France Castro of ACT Teachers party list, Mujiv Hataman of Basilan, Edcel Lagman of Albay 1st District, and Raoul Manuel of Kabataan party list.[7][8] From filing to approval. it took the House of Representatives 17 days to deliberate on the bill.[9]

On May 24, 2023, Marcos certified the creation of the Maharlika investment fund as urgent to the Senate.[10] On May 31, 2023, the upper house had approved the third and final reading with a total of 19 senators voting in favor, one negative (Risa Hontiveros) and one abstention (Nancy Binay).[11] It will need President Marcos' signature before it becomes law.[12]

A bill that is certified as urgent allows lawmakers to bypass the constitutional rule requiring bills to be passed on three readings on separate days.[9] The president’s certification of urgency is typically made in order to respond to public calamities or emergencies.[13] On February 2023, a petition was filed to the Supreme Court requesting to nullify Marcos's certification of urgency, arguing that it is unconstitutional because no public calamity or emergency was expressly stated in Marcos's letter to the House.[13] This was later dismissed by the Court in May, citing that the petitioners "failed to present to Court any fact establishing the existence of an actual case or controversy ripe for adjudication".[14]

GSIS and SSS funding[edit]

Initially the Government Service Insurance System (GSIS) and the Social Security System (SSS) were obliged to contribute funds to the MIF under the proposed bill establishing the fund. The two institutions were later dropped as mandatory contributors.[15] However, both the boards of the GSIS and SSS would be permitted to contribute if they approve such a move.[16][17]

Reception[edit]

Economist Michael Batu said the fund, if managed properly, can help raise money to help the government's programs and achieve development goals.[18] Global Source economist Romeo Bernardo, on the other hand, believes that the proposal is poorly timed and that a sovereign wealth fund would just add to the Philippines' current financial and fiscal risks and raised concern for potential mismanagement, mentioning the 1Malaysia Development Berhad scandal.[19]

A group consisting of 12 organizations, namely the Foundation For Economic Freedom, Competitive Currency Forum, Filipina CEO Circle, Financial Executives Institute of the Philippines, Institute of Corporate Directors, Integrity Initiative, Inc., Makati Business Club, Management Association of the Philippines, Movement for Good Governance, Philippine Women's Economic Network, UP School of Economics Alumni Association and Women's Business Council Philippines, Inc., made a collective statement against the proposal. The group believes that there is no gap or "missing institution" in the Philippine economy that necessitates the creation of a sovereign wealth fund and prescribes the government to focus on the management of the country's fiscal deficit and public debt to avoid impediments to the delivery of public services and to prevent a downgrade of the Philippines' sovereign investment credit rating. It also notes that the Philippine economy has no commodity-based surpluses or surpluses from external trade from state-owned enterprises. It also opposed the idea of the GSIS and SSS contributing to the fund.[19]

The Philippine Stock Exchange has made its support of the proposal, stating that the "primary mission is to facilitate the flow of capital into more productive and beneficial channels and as a result, contribute to efficient capital formation for the country".[20]

See also[edit]

References[edit]

  1. ^ Lalu, Gabriel Pabico (December 16, 2022). "Maharlika Investment Fund bill OK rushed, say House minority solons". INQUIRER.net. Retrieved June 2, 2023.
  2. ^ "Romualdez, Sandro Marcos file bill creating PH sovereign wealth fund". Rappler. November 29, 2022. Retrieved December 3, 2022.
  3. ^ Cigaral, Ian Nicolas (December 3, 2022). "Does the P250-B Maharlika Wealth Fund make sense?". The Philippine Star. Retrieved December 3, 2022.
  4. ^ Corrales, Julie M.; Aurelio, Nestor (December 13, 2022). "Marcos says Maharlika fund creation his idea". Philippine Daily Inquirer. Retrieved December 15, 2022.
  5. ^ Saaduddin, Jii (June 5, 2023). "Maharlika Fund: A Proposed Sovereign Wealth Fund For The Philippines — Davao Corporate". Retrieved June 6, 2023.
  6. ^ "Maharlika Investment Fund bill approved, 90 percent of House members named co-authors". congress.gov.ph (Press release). December 16, 2022. Archived from the original on February 5, 2023.
  7. ^ de Leon, Dwight (December 15, 2022). "House passes Maharlika fund bill after Marcos certifies it as urgent". Rappler.
  8. ^ Eriberto, T. says (December 18, 2022). "Why 6 House lawmakers voted no to the Maharlika Investment Fund bill". RAPPLER. Retrieved June 2, 2023.
  9. ^ a b Gregorio, Xave (November 15, 2022). "With Marcos certification, House hastily approves Maharlika Investment Fund". Philstar.com. Retrieved June 2, 2023.
  10. ^ Cayabyab, Marc Jayson (May 25, 2023). "Marcos certifies Maharlika fund bill as urgent". Philstar.com. Retrieved June 2, 2023.
  11. ^ Bacelonia, Wilnard (May 31, 2023). "MIF gets Senate nod, now under bicam scrutiny" (in English and Tagalog). Philippine News Agency.
  12. ^ "Maharlika bill now up for Marcos' signature". CNN Philippines. May 31, 2023. Retrieved June 2, 2023.
  13. ^ a b "Makabayan bloc asks SC to nullify Marcos' certification of Maharlika fund as urgent". CNN Philippines. Retrieved June 2, 2023.
  14. ^ Torres-Tupas, Tetch (May 11, 2023). "SC junks petition vs. Maharlika Fund; Makabayan bloc appeals ruling". INQUIRER.net. Retrieved June 2, 2023.
  15. ^ Quismorio, Ellson (December 9, 2022). "GSIS, SSS dropped as Maharlika fund backers; BSP steps in". Manila Bulletin. Retrieved December 15, 2022.
  16. ^ Lalu, Gabriel Pabico (December 13, 2022). "GSIS and SSS may still invest in Maharlika fund if their boards will allow – lawmaker". Philippine Daily Inquirer. Retrieved December 15, 2022.
  17. ^ Gregorio, Xave (May 29, 2023). "Loophole in Maharlika bills lets SSS, GSIS invest in fund". Philstar.com. Retrieved June 2, 2023.
  18. ^ Gutierrez, Pia (December 5, 2022). "Economist: Maharlika fund can help govt complete projects if managed properly". ABS-CBN News (in English and Tagalog). Retrieved December 5, 2022.
  19. ^ a b Dumlao-Abadilla, Doris (December 5, 2022). "Economists, business groups oppose Maharlika Wealth Fund bill". Philippine Daily Inquirer. Retrieved December 15, 2022.
  20. ^ Ochave, Revin Mikhael (December 19, 2022). "PSE backs creation of Maharlika Investment Fund". BusinessWorld. Retrieved December 26, 2022.


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