Metro Manila (CNN Philippines, November 12) — A Makabayan bloc lawmaker on Sunday sounded the alarm about the revised implementing rules and regulations (IRR) of the Maharlika Investment Fund Act, saying it has “dangerous” provisions and lacks “thorough scrutiny.”
In a statement, ACT-Teachers Partylist Rep. France Castro questioned the IRR’s provision giving the president an extended authority.The removal of crucial safeguards and qualifications in the revised IRR raises doubts about the potential for political interference and the absence of checks and balances,” Castro said.The president’s increased authority to select the board of directors further raises questions about the independence and integrity of the fund and poses a danger to people’s funds,” she added.
The IRR gives President Ferdinand Marcos Jr. the power to either accept or reject the names recommended by the Advisory Board as director or chief executive officer of Maharlika Investment Corporation (MIC), which will manage the fund.
There was also no mention of the qualifications required for regular and independent directors, unlike in the previous IRR which indicated that one of the criteria would be a master’s degree in finance, economics, business administration, or a related field.
According to Castro, the amended IRR lowers the educational and professional experience requirements for key positions in the MIC and lessens the responsibilities of the audit and risk management committees.
The former IRR mandated that two senior executives from the MIC would serve on the audit committee, but the Office of the Presidential Adviser on Investment and Economic Affairs (OPAIEA) advised against it, saying that this is not advisable, hence the changes.
\”It is important to remember that its (audit committee) primary purpose is to provide independent oversight of the company’s financial reporting process,\” said Rafael Consing Jr., OPAIEA executive director.
“Including senior executives on the Audit Committee raises the risk that investors and the public may perceive the committee as being biased towards management and could undermine the committee’s independence and credibility,” Consing added.
The qualifications and functions of the MIC’s audit committee were no longer specified in the new IRR, but it states: \”The Board shall determine the qualifications, as well as the duties and responsibilities of the internal auditor.\”
Castro stressed that maintaining important safeguards and qualifications is more important than the justifications made for these changes, which include giving the MIC board more freedom.Meanwhile, House Speaker Martin Romualdez defended the revised IRR, saying these would “protect and guarantee the fund” against “political interference.The autonomy of the MIC Board allows for more objective and effective decision-making, free from undue political influence. This is crucial in overseeing a fund of this magnitude, which is pivotal to our nation’s economic growth,” he said.Romualdez also said Marcos has instructed the MIC board to “enjoy independence” as a demonstration of “a strong commitment to good governance practices, which will foster investor confidence and attract more investment to our country.Budget Secretary Amenah Pangandaman, who is in charge of finding qualified candidates to lead the MIC, also backed the IRR.I am glad of this development, as this shall allow the MIC Board to have the liberty and flexibility to fulfill its mandate, and explore beneficial investment opportunities,” she said. “This will also improve accountability, openness, and efficacy in carrying out the law’s provisions.
Pangandaman expressed optimism that the MIF will be operational by the end of 2023, in accordance with the given timeline.
