PRESIDENT Ferdinand Marcos Jr. has ordered the suspension of the implementing rules and regulation (IRR) of the Maharlika Investment Fund (MIF), his office announced Wednesday, Oct. 18, 2023.
Executive Secretary Lucas Bersamin issued a memorandum addressed to Bureau of Treasury officer-in-charge Sharon Almanza, Land Bank of the Philippine (LBP) president and chief executive officer (CEO) Lynette Ortiz, and Development Bank of the Philippines (DBP) president and CEO Michael de Jesus for the suspension of the implementation of the IRR of Republic Act 11954, or the Maharlika Investment Fund Act of 2023 “pending further study.”
The memorandum also ordered the respective agencies to notify all concerned heads of departments, bureaus, offices and other agencies of the executive department, including government-owned and -controlled corporations of such action.
“President Ferdinand R. Marcos Jr. issued a suspension because he wanted to study carefully the IRR to ensure that the purpose of the fund will be realized for the country’s development with safeguards in place for transparency and accountability,” Bersamin said in a statement.
Marcos signed into law the controversial MIF Act, which aims to drive economic development, widen the government’s fiscal space and ease pressure in financing public infrastructure projects, in July.
The MIF is a sovereign wealth fund that will be used to invest in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects to optimize the country’s national funds by generating returns to support the administration’s economic goals.
The seed capital of the MIF will be sourced from the LBP (P50 billion), DBP (P25 billion) and the National Government (P50 billion).
The IRR of the MIF was released in August.
In a statement to reporters, Senate Minority Leader Aquilino “Koko” Pimentel III welcomed Marcos’ order.
“Very good development. The law has a lot of defects. The concept has not been fully studied from the very start. Hence we should not wonder why apparently the law is not ready for implementation,” Pimentel said.
“Good that the Marcos administration appears to listen to reason,” he added.
Earlier, Pimentel noted the absence of an “iron-clad” provision in the Maharlika law that will ensure that pension funds will not be touched or compromised.
He said the threat that the pensioners’ hard-earned funds will be touched for the MIF “is still very much alive” and it should be prevented at all cost.
He said creating an investment fund – with a price tag of P500 billion – would require the government to divert resources away from more immediate priorities such as addressing poverty, hunger, education gaps, joblessness, healthcare deficiencies, and the country’s ballooning debt which stood at P14.35 trillion in August.
Pimentel was among those who filed a petition of certiorari and prohibition before the Supreme Court seeking to declare the MIF law as unconstitutional.
They seek the issuance of temporary restraining order and writ of preliminary injunction and/or status quo ante order against the Maharlika law, which was passed “despite warning of experts and lawmakers and broad opposition from the Filipino people.”
In Cebu, Melanie Ng, Philippine Chamber of Commerce and Industry regional governor for Central Visayas, said prudence is a very important component of good governance.
“I believe the re-evaluation and further review can provide better results for the good of our people and well being of our nation,” she said.
Kelie Ko, president of the Mandaue Chamber of Commerce and Industry, commended the President’s action.
“While it (MIF) may offer long term benefits to the country’s economy, it is best to make sure that the mechanisms for transparency and accountability are clearly put in place. In the meantime, there is a need for the general public to study and understand how the fund will work. I am sure that only the very few understand its functions and nuances,” Ko said.
Youth leader Kyle Enero also welcomed the development, but believes the MIF should still be abolished.
His remarks echoed the concerns of various groups, including his organization, the Kabataan Party-list, which strongly opposes the allocation of P500 billion to a sovereign wealth fund for what it considers “misprioritized” projects.
The group said the money should be redirected to improve critical sectors such as education, agriculture and healthcare, among others.
“If you look at it, they acknowledged that this investment fund is not okay,” he said.
Enero said the Philippines, unlike other countries, has no excess or surplus funds for this kind of scheme.