In Just 18 Days, House Passes the Maharlika Investment Fund; Senate to Start Discussions January 2023

House Bill (HB) 6608, more known as the Maharlika Investment Fund (MIF), swiftly passed the second and third readings in the House of Representatives last Thursday, December 15. This came after President Ferdinand Marcos, Jr. certified the bill as urgent on Wednesday, December 14. With 279 yes-votes and only 6 no-votes, HB 6608 took only 18 days from its filing to hurdle the lower house. 

Below is a summary of key amendments included in the bill’s final version:

• There is now a clause that explicitly prohibits the usage of pension and social security funds from the GSIS, SSS, and Home Development Mutual Fund in the MIF. 
• The Maharlika Investment Corporation (MIC) Board was restructured, with 6 regular members (down from 7) and 5 independent directors (up from 4). More qualifications were also added for prospective Board members. 

• The MIF’s profit allotment for the government’s social welfare projects was increased to 25 percent, to be delivered in the form of direct subsidies for families below the poverty line. Net profits will also be remitted to the government for use in other social welfare programs. 
• Offenses now include internal auditor collusion; acting as intermediaries, and engaging intermediaries, for graft and corrupt practices; tolerating graft and corrupt practices; and retaliation against whistleblowers. 
• Penalties for offenses were expanded, with the possibility of imprisonment not lower than 6 years and up to 20 years, and fines of anywhere from PHP 10,000 (USD 180.91) to PHP 5,000,000 (USD 90,454.35). 

National Economic and Development Authority (NEDA) chief Arsenio Balisacan expressed full support for the bill amid reservations. To him, the MIF’s success is anchored on how well-governed it will be and whether or not it is used to achieve the administration’s socioeconomic goals. To that extent, Secretary Balisacan believed that it is the appropriate time for the MIF to be created, as he expects it to be used for priorities outlined in the upcoming Philippine Development Plan. Philippine Stock Exchange (PSE) President and CEO Ramon Monzon also recently expressed support, saying that the MIF will create a “multiplier effect” by attracting more capital flow into big-ticket development projects.  

Representative Paul Daza, originally against the bill, eventually voted in favor of it and said that the newest version addressed most of the minority bloc’s concerns. Representative Margarita Nograles also maintained that despite accusations, the bill was not railroaded given the extensive revisions it underwent.  

The six lawmakers who voted against the bill disagreed, however. One of them, Representative Edcel Lagman, engaged in a two-hour interpellation to stall the bill’s progress and urge fellow lawmakers to slow down and consult with their constituents over the holiday break. The lawmakers’ shared concerns included investment risks, the MIF’s vulnerability to corruption, and an unfit economic environment with a large fiscal deficit, a heavy debt burden, and high inflation and poverty rates. 

Calling the MIF a “losing proposition,” former associate justice Antonio Carpio maintained that the MIF will only add onto the country’s ballooning fiscal deficit and debt burden. He noted that the MIF’s operating costs exceeds its projected annual revenues, and that the contributions from the involved government-owned-or-controlled corporations (GOCCs) to the MIF will also mean that the country’s general fund will have even less to source from. The government, he concluded, will then have to incur more debt to make up for what goes into the MIF. 

As for the Senate, the final version was only received last Monday, December 19. Representative Irwin Tieng earlier stated that Senator Mark Villar, his counterpart in the Senate Committee on Banks, Financial Intermediaries, and Currencies, expressed a willingness to use HB 6608 as a basis for a Senate version. Senate President Juan Miguel Zubiri also mentioned that he has already ordered the relevant committees to review the final House bill upon receiving it. 

Some senators continue to be cautious of the MIF. Senator Aquilino Pimentel III believed that the certification from the President was “an abuse… of presidential prerogatives and powers,” noting that he doesn’t see an urgent need that the MIF addresses to mandate such a certification. Senator Risa Hontiveros also called on NEDA to review whether the MIF is a good idea at all, and Senator Chiz Escudero expressed doubts on the wisdom of putting funds into the MIF instead of simply reallocating them into infrastructure projects.  

In any case, Senate President Zubiri said the Senate will only get to discuss the MIF by mid-January 2023 at the earliest. Hearings on the bill are expected to begin in mid-February.