Investing in Our Future
I applaud the Senate for passing the Maharlika Investment Fund bill on third and final reading during the last day of May which was also its last session day before it took a break. The House of Representatives have decided to adopt the Senate version of the bill so as of press time it is just waiting for the President’s signature.
The Maharlika Investment Fund is one of the many critical elements necessary to achieve the goals of the President’s Agenda for Prosperity as well as his administration’s economic goals. A Sovereign Wealth Fund is not something unique or crafted out of thin air by its proponents. It has been studied by this administration’s economic managers and is, as the Department of Budget and Management pointed out: “a tried and tested investment vehicle that has been used by governments in both First World and developing countries to achieve their economic objectives.”
For instance, Indonesia has utilized this strategy in order to fund its big ticket infrastructure projects even amidst the Covid-19 pandemic. Singapore has also used this scheme to increase its national budget since 2018 thereby making available more resources for development projects.
Finance Secretary Ben Diokno has correctly pointed out that the MIF is an important tool for economic development. He explained thus: “The Maharlika Investment Fund, which shall be the country’s first-ever sovereign investment fund, is designed to promote economic development by making strategic and profitable investments in key sectors.”
The briefings from the country’s economic managers extol the benefits of a Sovereign Wealth Fund. By making strategic investments in “public road networks, tollways, green energy, water, agro-industrial ventures, and telecommunications,” we can take advantage of their greater rates of return and socioeconomic impact.
I also think the MIF will provide President Bongbong Marcos with the fiscal flexibility to navigate the challenges of financing big ticket items necessary for the country’s development. Nothing can deflate the ebullience of economic recovery than the lack of resources.
But what about the fears of abuse and corruption? Our economic managers and our legislators have assured us that the Fund will be implemented and monitored with the “highest standards of accountability, fiscal responsibility, and good governance.” Secretary Diokno mentioned its adherence to the so-called Santiago Principles.
The Santiago Principles, which was drafted by the International Working Group of Sovereign Wealth Funds and accepted by the IMF’s International Monetary Financial Committee in 2008, consists of 24 generally accepted principles and practices that promote transparency, good governance, accountability and prudent investment practices in SWF activities.
Senator Mark Villar, my son and the leading voice of the MIF in the Senate, assured the public that the law they passed have sufficient safeguards to protect the people’s money against abuses. This is on top of the many laws that we already have against corruption.
While on this, the proud father in me cannot ignore the tremendous job Mark has done in marshaling the MIF bill in the Senate. I was particularly impressed with how he handled himself during interpellation where he convincingly answered critics’ questions while adhering to the spirit of parliamentary democracy. Those were tough questions thrown at him by his colleagues but I think he passed with high marks.
Vigilance, I think, is the greatest weapon we have against corruption in any form. Let us monitor the implementation of the law and ensure that officials who will be chosen to manage the MIF will follow sound practices and principles; have a clear investment policy that adheres to a disciplined investment strategies; and, more importantly follow a reliable risk management framework that will promote the sound investment operations and public accountability.
As I mentioned in the beginning of this column, the MIF is but one of the many tools in the war chest of President Marcos as he guides the recovery of our economy and ensure unity and prosperity for all Filipinos.