By Kyle Aristophere T. Atienza, Reporter
The initial sovereign wealth fund of the Philippines.
The fund is scheduled to begin functioning before the end of the year, as announced by President Ferdinand R. Marcos, Jr. on Thursday. The suspension of the fund was intended to enhance its organizational structure.
“The Maharlika fund is being organized quickly,” he stated before departing for Saudi Arabia, where he plans to promote the fund.
The financial stability of both state banks.
According to Mr. Marcos, the idea of the Maharlika Investment Fund (MIF) is still a valid one. As a result, we are still dedicated to making it functional by the end of the year.”
On October 12th, a memo was issued to the Bureau of the Treasury and the heads of LANDBANK and DBP, ordering the suspension of the MIF law’s IRR.
The President emphasized that the suspension should not be perceived as a determination of whether the Maharlika fund is right or wrong.
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“We have strived to make it as perfect and ideal as possible,” stated Mr. Marcos. He went on to mention that he sought advice from economic experts and other individuals involved in managing the fund.
“Their contributions were highly valuable, which is why we will now use them to improve the organization.”
Amenah F. Pangandaman, the Budget Secretary, stated that the economic team will collaborate with the President to carefully examine each provision and ensure that everything is in order.
“We will also seize this chance to involve multiple stakeholders in laying the foundation for the MIF’s launch.”
DAMAGE TO CREDIBILITY?
“Why suspend the entire Maharlika if the problem is simply improving the investment fund’s organizational structure?” Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, stated in a conversation on Facebook Messenger.
He stated that this demonstrates a complete breakdown in communication, or it reveals the chaos within Malacañang. He also added that this only serves to weaken the trust in the leadership.
According to Mr. Sta. Ana, the credibility of the Philippine government is crucial for investors.
Enrico P. Villanueva, a professor at the University of the Philippines Los Baños, questioned whether the MIF would be able to begin operations before the end of the year, given that there are only two and a half months remaining.
“It is unrealistic to expect the new fund to become operational within such a short time frame. The revision of the IRR could take a minimum of two weeks, and possibly longer if the administration prioritizes making significant improvements to the rules,” he communicated through a Messenger chat.
Previously, analysts suggested that the halting of the IRR may be intended to give the President more influence in selecting the top executives of Maharlika Investment Corp.
According to Mr. Villanueva, the directive to halt the execution of the IRR is an acknowledgement that there may be issues with the MIF, which could potentially extend to the law itself, regardless of the President and MIF supporters’ opinions.
According to Diwa C. Guinigundo, a Country Analyst at GlobalSource Partners, the issue lies not in the fund’s organization, but rather in the overall idea of establishing a sovereign investment fund while facing long-standing fiscal challenges. The solution, for Guinigundo, lies in addressing the root of the fiscal problem.fi
Concerns about inflation and increasing government debt.
In a message through Viber, he stated that the President missed a chance to fix this flawed legislation. He expressed concern that the uncertain approach to creating and implementing public policy would make it challenging to gain trust from investors and support from the market.
Terry L. Ridon, a professional who analyzes public investments and leads the think tank InfraWatch, stated that the suspension of the IRR should allow the government to evaluate the performance of LANDBANK and DBP, which have already made their contributions to the MIF.
In the coming months to a year, it is advisable for the government to review its options of either investing in MIF or improving the capabilities of government banks. This statement was made through Messenger chat by the individual.
The suspension of the Maharlika fund’s implementation came amid concerns on the financial stability of LANDBANK and DBP, which were required to contribute P50 billion and P25 billion, respectively, to the fund’s startup money.
After submitting their payments, the two banks requested leniency from the central bank’s rules on capitalization.
Daniel R. Espiritu, Assistant Secretary of air, stated that Mr. Marcos will likely advertise the Maharlika fund while meeting with investors during his attendance at the inaugural summit between airlines.
Leaders from Southeast Asia and the Gulf gathered today (October 20th).
During his pre-departure speech, Mr. Marcos expressed his government’s satisfaction with the response from our allies in the Middle East and globally towards the fund.
“We are highly encouraged by the fact that we are on the correct course.”
According to Bayan Muna Chairman Neri J. Colmenares, since the IRR of the MIF law has been suspended, the Supreme Court should recognize that the president is now uncertain about his own project and that there is no longer a need for its IRR.certification of urgency.”
In a statement on Thursday, the speaker stated that the President’s decision to halt the implementation of the MIF was due to the need for further examination, indicating that it was hastily put together. They are calling on the Supreme Court to rule on their petition challenging the constitutionality of the rushed passage of the Maharlika law and to permanently prevent the President from abusing their authority to expedite legislative processes.
According to Gary Ador Dionisio, the current dean of De La Salle – College of Saint Benilde School of Diplomacy and Governance, the government has not been able to demonstrate its ability to safeguard public funds.
The individual stated over Messenger chat that the MIF is not needed and impractical in safeguarding taxpayers’ funds. They also expressed the belief that the Philippines, being a vulnerable institution, is susceptible to oligarchic motives.