The Philippine Congress passes bill setting up controversial sovereign wealth fund
President Marcos signed into law the bill approved by Congress. For him, the Philippines is “ready to enter a new age of sustainable progress”, but the opposition is not convinced, and neither are various business groups, academics, and civil society groups.
Manila (AsiaNews) – Philippine President Ferdinand Marcos Jr today signed into law the Maharlika Investment Fund (MIF) bill, six months after expressing support for the controversial sovereign wealth fund.
“The Maharlika Investment Fund is a bold step towards our country’s meaningful economic transformation,” he said after signing the bill.
“Just as we are recovering from the adverse effects of the pandemic, we are now ready to enter a new age of sustainable progress, robust stability, and broad-based empowerment,” Marcos added. “For the first time in the history of the Philippines, we now have a sovereign wealth fund designed to drive economic development.”
Previously called the Maharlika Wealth Fund, the MIF is set to be used to invest in domestic and foreign corporate bonds, commercial real estate, and infrastructure projects.
Marcos pitched the fund in his foreign traves, particularly at the last World Economic Form in Switzerland last January. At home however, the fund has met with opposition both in and outside Congress as it could be vulnerable to graft.
Senate minority leader Aquilino Pimentel III urged President Marcos to veto the bill. In his view, the MIF will siphon resources away from immediate needs like education and healthcare in favour of financial interests.
Opposition to the investment fund also comes from several business groups, academics, and civil society groups. What is especially worrying is the use of state pension funds as start-up capital.
In addition to sources of funding, some experts are concerned that taxpayers' money accumulated for the Maharlika could be used to directly finance high-risk projects sensitive to market fluctuations.
Meanwhile, some Canadian companies have already expressed interest in investing in the fund, including investment firms and pension funds, signalling to Marcos that they are ready to do business in the country, this according to the Department of Finance.
Timeline of the controversial approval
In December 2022, when the bill was before the House of Representatives, but not yet tabled in the Senate, Marcos defended it for the first time, arguing that it would be "advantageous” for the government.
In mid-January, the House – under speaker Martin Romualdez, Marcos's cousin – passed the bill. Soon after, Marcos certified the bill as urgent, so it could pass faster, leaving lawmakers with less time to scrutinise it.
The Senate, dominated by a pro-Marcos "supermajority”, took more time to vet the proposed legislation; nevertheless, it approved the bill establishing a sovereign wealth fund, which went to President Marco for the signing and promulgation.
The idea of the Maharlika fund did not originate with Marcos, even though it came from Malacañang Palace, the official residence of the president.
Curiously, Marcos did not mention it in his State of the Nation address, when presidents typically explain their priorities for the coming year.
Photo RTV Malacañang (Presidential Broadcast Staff-Radio Television)