Metro Manila (CNN Philippines, October 19) — The economic team will “work closely” with President Ferdinand Marcos Jr. for a thorough review of the previously approved implementing rules that set in motion the law that created the country’s first sovereign wealth fund.
This is the response of Budget Secretary Amenah Pangandaman to the president’s decision. The budget chief is a member of the three-man advisory body that vetted and prepared the shortlist of candidates who will make up the board of the Maharlika Investment Corporation (MIC), the wealth management company or fund manager behind the Maharlika fund.
The advisory body, which is independent from the board, consists of the secretaries of the National Economic and Development Authority (NEDA) and the Budget Department, as well as the head of the Bureau of the Treasury.
That three-man team already submitted to Marcos a shortlist of candidates end of September within the timeline earlier set by Finance Secretary Benjamin Diokno.
Diokno, as chairman (ex-officio) of the Maharlika Investment Corporation board, said he wants the fund operational before the year ends.
But that timetable suffers a setback after Malacanang handed down on Oct. 18 a directive recalling the IRR (implementing rules and regulations) until “further study,” fanning speculation that Marcos was not happy with the shortlist and now zeroes in on “improvements” on the fund’s “organizational structure” – apparently referring to the board.
The composition of the MIC board is as follows:
-Secretary of Finance – chairman, ex-officio
-MIC chief executive officer (CEO)
-the president and CEO of the Land Bank of the Philippines
-the president and CEO of the Development Bank of the Philippines (DBP)
-two regular directors
-three independent directors
Pangandaman said economic managers “subscribe to the wisdom of the president in suspending the IRR” and will mobilize more consultations with stakeholders ahead of the fund’s launch.
“We subscribe to the wisdom of PBBM in suspending the IRR as this is not just an economic strategy for us but a historic first sovereign investment fund,\” the budget secretary said in a mobile phone reply to a CNN Philippines’ query.
\”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 continued. \”We will also take this opportunity to engage in more multi-stakeholder groundwork in preparation for the launch of the MIF.\”
CNN Philippines has reached out to all members of the advisory body, but has yet to hear from the NEDA and the Treasury.
In an email reply to the network, another member of the Maharlika board, the Land Bank of the Philippines, said it already received the instruction from Malacanang.
The Landbank and the Development Bank of the Philippines earlier deposited billions of pesos in escrow with the Treasury as part of the Maharlika Fund seed money.
“Yes, we have received the said instruction and we understand, as expressed by Executive Secretary Bersamin publicly, that it is to further review/study the law and its implementation,\” Landbank said in its email reply to CNN Philippines.
\”At this point, we have nothing to add, nor do we feel it necessary to volunteer any preemptive speculation, as we also await further study of the IRR,” it added.
The DBP separately said it will explore ways to abide by the Maharlika Fund Investment Act’s capitalization provisions while maintaining the health of its balance sheet. The two state-run banks earlier sought regulatory relief in relation to their capitalization requirements.
“Nothing else stated except further study. We will study options on our contribution,” DBP President and CEO Michael de Jesus said in a statement.
