First District Cong. Edgar Chatto bared his affirmative vote for the Maharlika Investment Fund (MIF) which Congress approved on third reading just before Congress adjourned for 2022.
“It is a welcome note how the bill is opening the discussion on an economic innovation for the country,” Chatto stated in his explanation which also highlighted significant amendments that were introduced during the discussions.
Chatto cited amendments that include the removal of the pension funds from Social Security System (SSS) and Government Insurance Service System (GSIS) as well as the funds from the national budget as the source for the MIF.
He favored the professionalization of fund management through increased independent members from the private sector in the MIF’s Board.
He pointed out with favor the reduction of assets for administrative overhead and operation expenses from 10% to 2%; putting in place criminal provisions and other penalties for mismanagement.
He thinks that provision of a transparency website for all reports and investments of the MIF; inclusion of transparency checks on three levels – internal audit, external audit and state audit through Commission on Audit (COA) – is a good idea.
He favors the creation of a Joint Congressional Oversight Committee to monitor implementation and review of the MIF.
The reduction of seed money of the fund from P250 billion down to P110 billion and the earmarking of 25% of net profits for social welfare programs are favorable to the congressman.
WITH CAUTION
The lawmaker, however, also expressed reservations on specific provisions which, hopefully, he said, can be addressed while the bill discussion is in progress, especially at the Senate.
He pointed out the need to ensure that care is observed in the inclusion of funds from banking institutions specifically on the exercise of their respective charters as well as for the purpose of assets management, national development of foreign investment.
He underscored the strict observance of transparency in the qualifications and process of selection to warrant the integrity of fund managers.
“The Philippines must carve its own path taking into consideration our own political, historical, cultural and social milieu,” Chatto said of apprehensions on the timing and readiness of the country for a new way of uplifting the economy.
“Congress must work closely with the country’s tested economic planners and managers to ensure that the proposed legislation will give the maximum benefit where it is due,” he concluded.
The MIF is a proposed sovereign wealth fund. It is a pool of funds which the State will invest abroad to earn profit. The profit in turn is designed to be used to finance various projects in the country.
Several countries like Singapore and Norway have their own sovereign wealth funds.