Maharlika fund bill has 8 safeguards to ensure integrity, says nat’l treasurer

There are eight measures included in the bill proposing the multi-billion peso Maharlika Investment Fund to ensure its integrity, the Bureau of the Treasury said on Wednesday.

"We support the calls to study the bill to ensure that risk management is in place," National Treasurer Rosalia de Leon said in a statement.

"Upon reading the bill, we note that there are already eight measures that will safeguard the integrity of the Fund,” she added.

Last week, lawmakers in the House of Representatives filed House Bill 6398 which seeks to establish the Maharlika Wealth Fund that targets to allow the government to invest surplus reserves in real estate and financial assets.

The authors of the proposed measure include House Speaker Ferdinand Martin Romualdez, and Ilocos Norte 1st District Representative Ferdinand Alexander “Sandro” Marcos III, cousin, and son of President Ferdinand “Bongbong” Marcos Jr. respectively.

Under the proposal, GFIs such as the GSIS, the SSS, the Land Bank of the Philippines (LandBank), and the Development Bank of the Philippines (DBP) will be allowed to invest their funds for higher returns.

De Leon enumerated the eight measures under the proposed sovereign wealth fund which will ensure its integrity.

“First, the MWF will strictly adhere to the Santiago Principles, a voluntary set of 24 guidelines observed by more than 20 countries with Sovereign Wealth Funds designed to promote good governance, accountability, transparency, and prudent investment practices as well as maintain a stable and open investment climate,” the national treasurer said.

The second safeguard measure is that all financial transactions shall be governed by the applicable government laws, rules, and regulations, according to de Leon.

“Third, there will be an internal audit,” she said.

“There will be financial reporting and audit of records wherein the financial statements and reports shall be prepared, upon the advice of the Advisory Body, in accordance with pertinent provisions of the Act and its Implementing Rules and Regulations (IRR), as well as International Financial Reporting Standards (IFRS) and principles,” she added.

The Treasury chief said the Advisory Board shall appoint an internal auditor who shall provide written interim financial and management reports.

“Fourth, there will be an internationally recognized auditing firm that will be the External Auditor of the Fund to audit its financial statements,” de Leon said.

“Fifth, the Fund will be under the scrutiny of no less than the Commission on Audit. The books and accounts of the MWF shall be subject to the examination and audit of the Commission on Audit pursuant to Article IX of the 1987 Philippine Constitution,” she said.

The sixth measure is that the Advisory Body will assist the board of directors in the formulation of general policies related to investment and risk management.

“The Advisory Board will be sought for consultation in case of transactions that will affect Balance of Payments and monetary aggregates, especially those which impact domestic liquidity and reserve money,” the national treasurer said.

The Advisory Body is composed of the Secretary of Finance, the Secretary of Budget and Management, the Treasurer of the Philippines, and the Socioeconomic Planning Secretary and Director-General of the National Economic and Development Authority (NEDA).

“Seventh, there will be a Joint Congressional Oversight Committee (JCOC) tasked to oversee, monitor, and evaluate the implementation of the Maharlika Wealth Fund Act,” de Leon said.

“This will be composed of five members each from the House of Representatives and the Senate,” she added.

Lastly, the Treasury chief said that there is

a specific provision to prevent unnecessary withdrawals from the Fund.

“Section 15 of the bill states that no withdrawals of equity shall be made before 2028 and that, thereafter, equity withdrawals shall be made in accordance with the guidelines prescribed by the Board or the implementing rules and regulations of the Act,” de Leon said.

"We agree that we need to ensure that all these safeguards are in place for the protection of the funds of the people. However, with the proper safety measures, I believe we should be able to proceed with the Maharlika Wealth Fund as this will ultimately benefit our people," she added. —NB, GMA Integrated News