Philippine sovereign fund bill Maharlika signed into law today

Philippine President Ferdinand Marcos Jr. has signed the Maharlika Investment Fund into law amidst railroading allegations and other controversies and calls for abandonment.

Original story by Ramon Royandoyan and Christina Chi for the Philippine Star

President Ferdinand “Bongbong” Marcos Jr. has signed the Maharlika Investment Fund into law, greenlighting the creation of the country’s first sovereign wealth fund despite public outrage over the measure.

Ranking senators last month ironed out a redundant provision of the bill over Viber, causing a delay in transmitting it to the Malacañang for the president’s approval. The Office of the President received the enrolled bill in early July.

Before the MIF bill’s swift passage in Congress, Marcos bared in 2022 that he personally crafted the pitch for the country to have its own sovereign wealth fund.

Now law or Republic Act 11954, the MIF or will be used by the government to park taxpayer money in all sorts of investment instruments to help fund priority programs.

Opposition to the investment fund has largely come from business groups, academia, economists, opposition lawmakers, and civil society. They flagged several provisions as problematic, including the use of state pension funds as seed money.

Besides funding sources, some experts have also lamented that taxpayers’ funds stockpiled for the Maharlika could be used instead to fund projects directly.

This prompted economic managers of the Marcos administration, led by Finance Sec. Benjamin Diokno, to smooth things over by way of press briefings and some roadshows to attract the investing public.

Their main pitch was that the Philippines would be able to invest in its future. After all, returns from the projected investment could be used, in theory, to bankroll socioeconomic and infrastructure projects.

The MIF is a “bold step towards our country’s economic transformation” post-pandemic which will be managed with “financial, not political” decisions, Marcos said during the signing Tuesday.

“The fund will fail if we do not make money on the fund. It’s that simple. But there are so many opportunities we cannot allow to slip by, and that is why we are putting (it) up,” Marcos added.

Ramon Royandoyan and Christina Chi of the Philippine star outlined more implications of the Maharlika Investment Fund and highlighted how the fund will source its capital. Read their original story here. https://www.philstar.com/headlines/2023/07/18/2281947/amid-calls-abandon-maharlika-dream-marcos-signs-investment-fund-law