CAMARINES Sur Rep. LRay Villafuerte has said the broad popular support for President Ferdinand Marcos Jr.’s pet initiative Maharlika Investment Fund (MIF) should convince its critics to give this House-approved investment vehicle a chance to prove its worth as soon as the Senate passes its own version after the 19th Congress reopens this January following its month-long yearend recess.

The president of the National Unity Party (NUP), Villafuerte earlier rallied the public to support the MIF after it was overwhelmingly passed by the leadership of Speaker Ferdinand Martin G. Romualdez on third and final reading by the House of Representatives by a 279-6 vote before the December 17 to January 22 break of legislators.

Villafuerte issued this weekend statement as Department of Foreign Affairs (DFA) Undersecretary Carlos Sorreta earlier bared the plan by President Marcos to “soft launch” the MIF during his January 15-20 trip to Davos, Switzerland to attend the 2023 World Economic Forum (WEF).

In a pre-departure briefing, Sorreta said the President would present the “broad strokes” of the MIF before his fellow national leaders at this year’s WEF summit.

Sorreta quoted the President as saying that, “We have been developing all these excellent fundamentals; there’s much that we can offer investors. Let’s talk about the sovereign wealth fund that’s being set up.”

“It’s really more (of) a soft launch. It’s to introduce it … It will be broad strokes. We have to leave the specifics to the legislation. We’re working with the Department of Finance (DoF) and the Department of Trade and Industry (DTI) to come up with very precise, targeted messages for the President,” he added.

Given the Marcos Administration’s limited fiscal space resulting mainly from the enormous spending by the previous government on COVID-19 response, Villafuerte earlier called for support behind the President’s appeal for all Filipinos to give House Bill (HB) 6608—the MIF bill—a chance and wait for the Congress to hammer out what Mr. Marcos described as the “perfect” version of this investment vehicle.

“With one in every two Filipinos who are aware of the MIF actually supportive of this President-endorsed HB 6608, there is reason for even the doubting Thomases to give this proposal a chance to prove its worth once the Senate further tweaks and passes this year its own version that would likely address other concerns, if any, raised by skeptics and other critics,” Villafuerte said.

He was referring to the December mobile-based nationwide survey by market research and opinion pollster Tangere that showed that of the 83.75% of Filipinos who are aware of the MIF, 54.08% of them support its passage into law.

Of the 2,400 people polled across the country over the Dec. 8-10 period, Tangere said 2,010 knew about the MIF, and more than half of them supported this proposal, 65.47% believed its establishment was timely, 57.86% said it could help fuel crucial Administration projects, and 56.67% believed it would help grow our economy.

Tangere reported that the poll had a margin error of 2.191%; and that 12% of the respondents were from Metro Manila, 23% from North and Central Luzon, 22% from South Luzon, 20% from the Visayas, and 23% from Mindanao.

“The Tangere survey results illustrated that aside from having the backing of various business groups and leaders as well as of international institutions like the ADB (Asian Development Bank), this investment vehicle plan already green-lighted by the House enjoys broad support among Filipinos from all over the country,” Villafuerte, a co-author of HB 6608, said.

He noted that President Marcos was spot on in asking the people last December to wait for the final version of the MIF bill to be drawn up by Congress , “considering that the MIF will still go through refinements after HB 6608 is transmitted to the Senate. At the Senate, it will again go through further refinements before the final, consolidated measure is hammered out at the bicam (bicameral) negotiations before being ratified by both Houses and then submitted to Malacañan Palace for the President’s signing into law.”

Villafuerte pointed out that the initial reservations over certain features of the MIF bill, such as the use of Government Service Insurance System (GSIS) and Social Security System (SSS) pension funds, along with the Fund’s board chairmanship by the President, were quickly addressed with the major changes or amendments made last December at the House committee level.

He said that later last month, the measure reported out and signed by the respective chairmen of the House committees on banks and financial intermediaries, on appropriations and on ways and means already excluded the GSIS and SSS pension funds from the MIF’s funding source, and put the Finance Secretary (Diokno) as the chairman, in lieu of the President—as proposed in the original bill—of the would-be Maharlika Investment Fund Corp. (MIC).

In the House-approved version, he said the number of independent directors in the MIC Board was also raised from the original 2 to the current 5 independent directors to increase private-sector participation.

Villafuerte said HB 6608 provides that the initial investment will come only from the investible funds of the Land Bank of the Philippines (LandBank) and Development Bank of the Philippines (DBP), gaming revenues of the Philippine Amusement and Gaming Corp. (PAGCOR) and other state-run gaming operators, and dividends of the Bangko Sentral ng Pilipinas (BSP).

The respective chairmen of the banks, appropriations and ways committees are Reps. Irwin Tieng (Manila), Elizaldy Co (Ako Bicol) and Joey Salceda (Albay).

Villafuerte said that investments from the proposed MIF will also be limited to big-ticket projects approved by the NEDA Board, which is chaired by the President, to make sure such ventures are in support of the Marcos administration’s socio-economic development program.

He noted that the final House bill also has punitive measures—ranging from a prison term of six years to 20 years and/or a fine of P10,000 to P5 million—against future violators of investment guidelines and policies to be drawn up by the MIC Board.

Through the plenary deliberations at the House prior to its final approval last December, Villafuerte pointed out that the bigger chamber managed to come up with a much better version that had prompted even those like BSP Gov. Felipe Medalla who had initial concerns over the MIF, eventually expressed full support for it.

He said Medalla subsequently stressed that this fund could help attract foreign direct investments (FDIs) into the Philippines.

For Medalla, “The way it’s done now, the BSP’s ability to maintain price stability will not be negatively affected by the current version (of the MIF bill). And, therefore, given that our concerns in the central bank have been completely addressed, and the criticism on inclusion of the pension funds has been addressed as well, I support the passage of the bill.”

“I think in times like this, let’s support the President. There are many things that I think he wants to do. And if this fund can be used to attract foreign investors to invest in the fund, as in Indonesia, it could be good for the country,” Medalla added.

As for Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) director-general Arsenio Balisacan, the MIF would boost the government’s investment priorities under its Philippine Development Plan (PDP) 2023-2028.

Villafuerte said he agreed with Balisacan’s view that the MIF would provide another source of funds for bankrolling the country’s investment priorities, just like the public-partner partnership (PPP), official development assistance (ODA) and General Appropriations Act (GAA) or national budget options for the government.

The congressman said that as another funding vehicle for priority investments, the MIF has the potential of being a vital source of capital for infrastructure and other big-ticket projects that would otherwise have to be financed by foreign creditors.

“The MIF will expand the government’s fiscal space and enable it to grow investments in long-term projects such as those in infrastructure, countryside development and agriculture,” he said.

Villafuerte pointed out that the House-passed bill provides for multiple levels of auditing or scrutiny of the MIF’s financial statements and reports, with the mandated engagement of (1) an internal auditor that shall be independent from the MIFC management and to be under the direct control and supervision of the MIFC Board of Directors, and (2) an internationally recognized auditing firm to be its external auditor.

Moreover, he said, the MIC’s books and accounts should be examined and audited—in accordance with international best practices—by the Commission on Audit (CoA), which has to coordinate with the hired External Auditor.

The financial statements and reports shall be prepared in accordance with International Financial Reporting Standards (IFRS) and principles, he said.

Also, a Maharlika Investment Fund Joint Congressional Oversight Committee (MIF-JCOC) shall be created to oversee, monitor and evaluate the implementation of the would-be MIF Law, said Villafuerte.

In support of the right to freedom of information (FOI), he said the bill requires all MIF and MIC documents on investments and audit records to be “open, available, accessible to the public, as well as the Statements of Assets and Liabilities (SALNs) of MIC officials.

As pointed out in the media, he said that through funds sourced from the would-be MIF, the government could fund such capital-intensive investments, say, energy exploration in the West Philippine Sea (WPS).

“Hence, I am appealing to one and all to support the President’s appeal for the public to give House Bill (HB) 6608 a chance and wait for the Congress to hammer out a legislative initiative designed to mobilize savings for augmenting funds for big-ticket infrastructure works and other priority programs meant to help the Chief Executive deliver on his campaign promise to improve the lives of all Filipinos,” Villafuerte said.

The MIF’s supporters from the business community include Philippine Stock Exchange (PSE) president-CEO Ramon Monzon, who said this proposed fund would help mobilize and invest capital for big-ticket infrastructure projects.

“Since the MIF seeks to attract and invest capital for big-ticket infrastructure projects, sustainable green and blue infrastructures and countryside development, we believe these investments will create a multiplier effect that would attract more fund-raising activities and portfolio investments and in turn contribute to the growth and development of our capital markets,” Monzon said.

ADB Philippines country director Kelly Bird believes, too, that such a fund could “help deepen the domestic capital market. It creates a large institutional investor and that allows mobilization of savings within the economy for investments and so on. So it does have very good benefits.”

The President told reporters during his trip to Brussels, Belgium to attend the Association of Southeast Asian Nations-European Union (AESAN-EU) Commemorative Summit that: “We’re just doing the regular process of looking at the (MIF) bill. Well, not we. It’s the legislature. So let them do their jobs. Tama ‘yan. Para gawin nilang perfect. Let’s not debate until we see the final form because we could be debating about provisions that no longer exist. So antayin natin kung ano’ng gagawin ng legislature.”

Mr. Marcos asserted that the MIF is a good investment vehicle, saying “I wouldn’t have brought it up otherwise … It’s very clear that we need added investment. This is another way to get that.”

Villafuerte, who is majority leader of the Commission on Appointments (CA), said at the CA committee hearing on the designation of Balisacan as NEDA chief that: “I support Malacañan Palace’s investment fund plan.”

At the December 13 hearing on Balisacan’s appointment that was conducted by the CA committee on tourism and development chaired by (Galing sa Puso) Rep. Gay Jose Padiernos, Villafuerte expressed his backing for HB 6608 after asking Balisacan whether he supported this proposed MIF.

“We are in full support, Your Honor. In fact, the recent statement read by (Finance) Secretary Ben (Benjamin) Diokno was a joint statement among us in the Cabinet and economic team. So that’s an expression of our full commitment,” said Balisacan, who first served as NEDA chief and socioeconomic planning secretary during the administration of the late President Benigno “Noynoy” Aquino III.

In that joint statement mentioned by Balisacan, the President’s economic team said they expect the MIF to boost investments and funding of infrastructure projects, particularly in agriculture, to move forward the Marcos administration’s “Agenda for Prosperity.”

At the CA panel hearing, Villafuerte told Balisacan: “I think we should give it (MIF) a try. When the President said we should give it a try, we are all up for it. There’s no harm in trying as long as the proper safeguards are there. At the end of the day, it’s up to the Congress to really come out with a good measure.”

Balisacan said at his CA hearing that it was his “personal view” that “the laws that Congress pass are good or bad depending on how you (lawmakers) make it, and governance is key to that. But the governance framework that you put into the law, that’s what makes it workable or not workable. So that’s why I think that having that proposal … to Congress will allow us to debate the merits or demerits of the proposal, and put the appropriate assurance that it will work.”

Balisacan said the proposed MIF “has the potential of attracting funds into … that otherwise is not used in a way that addresses the immediate concerns and priorities for national development … that fund could supplement the limited fiscal resources that we have. For example, it could be used to improve the attractiveness of PPP projects, particularly for critical areas like infrastructure.”