During President Marcos’ second State of the Nation Address (Sona), one of the highly anticipated subjects was the Maharlika Investment Fund. President Marcos mentioned it briefly, stating that the fund would be used for high-impact and profitable investments, specifically the ‘Build Better More’ program. He emphasized that the gains from the fund would be reinvested into the country’s economic well-being. To address concerns about the fund’s governance, President Marcos assured that a group of internally recognized economic managers would oversee it, ensuring sound financial management and decision-making based solely on financial considerations, free from political influence. He also assured that funds for social security and public health insurance would remain separate. Despite these reassurances, some legislators have raised the possibility of challenging the fund’s legality in the Supreme Court.
Critics of the fund, including former finance undersecretary Romeo Bernardo, have criticized the perceived haste in approving the Maharlika Investment Fund Act of 2023. They argue that the fund has not undergone thorough analysis and poses a serious threat to the country’s economy. The law was enacted just days before President Marcos’ Sona, despite concerns raised by legislators and experts from the University of the Philippines’ School of Economics.
The Maharlika Investment Fund has also become a subject of criticism against the Marcos administration itself. Various groups, such as Gabriela Women’s Party and Bagong Alyansang Makabayan party list, have condemned the fund as a potential source of corruption and criticized the administration for prioritizing it over more pressing issues like wage hikes and rising inflation.
Given these concerns, it is crucial for the Marcos administration to be transparent about the fund’s details. Prioritizing a detailed plan for the creation of the fund and the Maharlika Investment Corp. (MIC), which will oversee it, is essential to avoid future fiscal risks. This includes finding credible and highly regarded fund managers, CEO, and board directors to ensure effective management. It is important to select individuals with no political affiliations, as suggested by former finance secretary Gary Teves. The success of the sovereign wealth fund depends greatly on the competency and integrity of those managing it.
As of now, the MIC has reserved board seats for key figures such as the finance secretary, presidents of Land Bank of the Philippines and Development Bank of the Philippines, regular directors, a CEO, and independent directors. Senator Mark Villar, the principal author of the bill, expressed confidence that the fund’s initial capital of P125 billion would be well-managed and dispelled any doubts about potential mismanagement. However, assurances alone are not sufficient. The Filipino people need transparency and vigilance throughout the fund’s implementation, from the formulation of its rules and regulations to the selection of board members. The Marcos administration must provide the public with comprehensive information on how the fund will work and its benefits.
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