Metro Manila (CNN Philippines, October 18) — President Ferdinand Marcos Jr. ordered the suspension of the implementing rules and regulations (IRR) of the controversial Maharlika fund, according to the top official of the Development Bank of the Philippines (DBP).
In a message to CNN Philippines, DBP President and CEO Michael de Jesus said Wednesday that a memorandum from the Office of the Executive Secretary “directed the Treasurer to suspend implementation of the IRR pending further study.”
The executive said they received the memorandum “two days ago.”
This was also confirmed by the Office of the Executive Secretary in a separate statement.
It said Marcos ordered the 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.”
Meanwhile, asked about possible loopholes in the IRR that might have prompted the suspension, De Jesus said: “Nothing else stated except further study.”
In a separate statement on Wednesday, Budget Secretary Amenah Pangandaman said she “subscribed to the wisdom” of the president regarding to the suspension of the IRR.
The economic team will work closely with the President to prudently review all provisions line by line and make sure that all things are in order,” she said.
Pangandaman added they would take this opportunity to prepare for the launch of the MIF.
To jumpstart the Maharlika fund operations, the DBP and the Land Bank of the Philippines remitted ₱25 billion and ₱50 billion, respectively, to the Bureau of the Treasury.
The IRR for the investment fund was issued late in August, and was set to take effect on Sept. 12, Finance Secretary Benjamin Diokno earlier said.
In July, Marcos signed the bill into law, just seven months after the idea was pushed at the lower chamber.
While it received criticisms even from economists, Marcos defended the Maharlika fund, saying the Philippines needed it to pursue infrastructure and structural developments without getting more loans.
READ: Maharlika fund ‘defective, poses serious risks’ to economy – UPSE faculty members
Diokno said this month that Maharlika’s investment activities may begin in the first quarter of 2024.
The finance chief has yet to issue a statement on this development.
Junk Maharlika fund, instead of suspension?
House Deputy Minority Leader and ACT Teachers party-list Rep. France Castro urged the president to totally scrap the Maharlika fund, as the suspension only showed that it “was rushed and flawed on so many levels.”
Castro also pointed out that the suspension came after the DBP and LandBank sought regulatory relief from the central bank due to the capital infusion they injected into the fund.
In a statement, Senate Minority Leader Koko Pimentel welcomed this “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. Good that the Marcos administration appears to listen to reason,” he said.
Will this affect the petition filed vs. Maharlika fund at the Supreme Court?
Solicitor General Menardo Guevarra said that this will depend if the petitioners decide to withdraw their appeal to declare the Maharlika Investment Fund unconstitutional.
“But if they don’t, and the SC does not suspend the proceedings either, the OSG will be prepared to submit its comment on the validity of the MIF law,” he said.
In September, Pimentel and former Bayan Muna party-list Representatives Neri Colmenares, Carlos Zarate, and Ferdinand Gaite brought their fight against the fund to the Supreme Court.
READ: Fight vs Maharlika fund reaches SC
