The bill creating the proposed Maharlika Investment Fund (MIF) reached the Senate plenary on Monday.
Senator Mark Villar, the chairperson of the Senate Committee on Banks, Financial Institutions, and Currencies, sponsored Senate Bill No. 2020 which contained Committee Report No. 58.
The measure reached the Senate floor three weeks after the committee ended its hearings on the MIF bills.
Villar said the funds will hasten the implementation of big-ticket infrastructure projects endorsed by the National Economic Development Authority (NEDA).
These include public road networks, tollways, green energy, water, agro-industrial ventures, and telecommunications.
Under SB 2020, the initial capitalization will come from the investible funds of the Land Bank of the Philippines and the Development Bank of the Philippines; dividend remittances of Bangko Sentral ng Pilipinas; national government share of income from Philippine Amusement and Gaming Corporation; and proceeds from privatization and transfer of assets.
According to Villar, LBP’s investment in the Maharlika Investment Corporation (MIC) will account for around 3.7 percent of its investible funds while the DBP’s investment will be at around 3 percent.
The senator said that the government financial institution’s contribution to the initial seed fund was “reasonable and will not crowd out other lending obligations that they need to fulfill their respective mandates.”
The MIC will be considered a government-owned and controlled corporation and will be run on a commercial basis.
Unlike in the original version of the measure, SB 2020 removed the exemptions and privileges of the MIC and the MIF, particularly in local and national taxes.
Villar said this would ensure a level playing field.
The MIF will also be governed by the Government Procurement Reform Act under the Senate version.
Meanwhile, the composition of the MIC board will be as follows:
- Finance secretary to serve as chairperson;
- MIC chief executive officer to serve as vice chairperson;
- President and CEO of LBP as a member;
- President and CEO of DBP as a member;
- Two regular directors; and
- Three independent directors from the private sector.
The economic team will serve as the advisory body to help ensure that they will comply with proper financial reporting and auditing standards, as well as align investment decisions with fiscal and monetary policies.
The advisory body will be composed of the Budget secretary, the NEDA secretary, and the National Treasurer.
To ensure accountability and proper governance of the fund, Villar said SB 2020 includes the following safeguards:
- The board is required to appoint an internal auditor which shall be independent of the MIF management and shall be under the direct control and supervision of the board of directors;
- An internationally recognized auditing firm will serve as the external auditor of the fund;
- The books and accounts of the MIF shall be subject to strict examination by the Commission on Audit;
- A joint congressional oversight committee will be constituted to oversee, monitor and evaluate the proposed MIF Act. It will be composed of five members each from the Senate and the House of Representatives; and
- All documents of the MIF and the MIC shall be open, available, and accessible to the public. —NB, GMA Integrated News