Revised IRR for Maharlika law released

MANILA. In this file photo, President Ferdinand Marcos Jr. signs the Republic Act 11954, or the Maharlika Investment Fund Act in a ceremony at the Kalayaan Hall of Malacañan Palace in Manila on July 18, 2023.
MANILA. In this file photo, President Ferdinand Marcos Jr. signs the Republic Act 11954, or the Maharlika Investment Fund Act in a ceremony at the Kalayaan Hall of Malacañan Palace in Manila on July 18, 2023.NIB-PNA

THE President has been granted the authority, under the revised Implementing Rules and Regulations (IRR) of the Maharlika Investment Fund (MIF) Act, to accept or reject nominees for key positions.

Under Section 30 of the revised IRR, “the President may either accept or reject the recommendation of the Advisory Board: and, provided, finally, that, the President may require the Advisory Body to submit additional names of nominees.”

The advisory body is composed of the secretaries of the Bureau of Treasury, National Economic Development Authority and Department of Budget Management.

"The Advisory Body shall select suitable and qualified candidates for vacancies in the PCEO (President and Chief Executive Officer), and Regular and Independent Director seats from the public and private sectors," the new IRR read.

"Only those nominations and applications that meet all the qualifications and do not have any of the disqualifications will be transmitted to the Advisory Body for further evaluation and shortlisting," it added.

Also among the salient changes in the revised IRR is the removal of specific advanced educational degree requirements for those who can be appointed to manage the sovereign wealth fund.

It was specified in the initial IRR that the PCEO of the Maharlika Investment Corporation (MIC) “must have an advanced degree (MBA, MA, MSc, PhD) in Finance, Economic, Business Administration, or a related field from a reputable university; additional professional certifications such as CFA or CPA is preferred.” Meanwhile, the chief investment and operating officer (CIOO) “must have a master’s or advanced degree in Finance, Economics, Business Administration, or a related field.”

In the revised IRR, qualifications for CIOO only include a degree in Finance or a related field and “has a proven expertise in managing a team of financial analysts and investment professionals.”

Qualification and additional requirements for regular and independent directors of the MIC were also removed under the revised IRR.

In a statement, Monetary Board Member and former Treasurer of the Philippines Rosalia De Leon said the qualifications were removed to give more independence to the Board in determining the specific qualifications of the other officers of the MIC in order to carry out its mandate to efficiently manage the MIF.

“The President wants the Board to be insulated from political influence and considerations and would like to give the leeway to set the qualifications in the best way they know how based on their experience and expertise in fund management,” she said.

The Malacañang said President Ferdinand “Bongbong” Marcos Jr. also wanted to guarantee that the members of the Maharlika Investment Corporation (MIC) would exercise independence to give the body more latitude in managing the fund, thus promoting good corporate governance.

The MIC Board will be composed of the secretary of Finance as the chairperson in an ex-officio capacity, PCEO as the MIC vice chairperson, president and CEO of the Land Bank of the Philippines, president and CEO of the Development Bank of the Philippines and three independent directors from the private sector.

The Office of the Executive Secretary, for its part, said that the revisions introduced by Marcos to the IRR of the MIF “serve to clarify, while simultaneously buttressing, the exercise of the discretionary powers of the Board of Directors to maintain its independence; ensure that the MIC has a free hand to explore gainful investment opportunities, while adhering faithfully to the letter of the law; and, ensure that investments are of high impact and are in line with the socioeconomic development program of the government.”

The seed capital of the MIF will be sourced from the Landbank of the Philippines (P50 billion), Development Bank of the Philippines (25 billion) and the National Government (P50 billion).

The funds 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. (SunStar Philippines)

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