Senate approves Maharlika Investment Fund Bill

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Metro Manila (CNN Philippines, May 31) — With a 19-1-1 vote, senators early Wednesday morning approved on third and final reading Senate Bill (SB) 2020 which creates the Maharlika Investment Fund.

Deputy Minority Leader Sen. Risa Hontiveros voted against the bill while Sen. Nancy Binay abstained. Minority Leader Sen. Koko Pimentel and Senators Imee Marcos and Chiz Escudero were not present in the voting.

The approved measure was a consolidation of two bills: SB 1670 by Senator Mark Villar and SB 1814 by Senator Raffy Tulfo.

READ: The proposed Maharlika Investment Fund: What you need to know

President Ferdinand Marcos Jr., in a letter to the Senate dated May 22, certified the bill as “urgent.” It would allow the measure to see second reading and third reading in just one day. Bills usually undergo three readings on separate days.

Major revisions

The Senate accepted Sen. Raffy Tulfo's proposed amendment to explicitly prohibit the Government Service Insurance System (GSIS), the Social Security System (SSS), the Philippine Health Insurance Corporation (PhilHealth), the Overseas Workers Welfare Administration (OWWA), and the Philippine Veterans Affairs Office (PVAO) from investing in the proposed fund.

"It prohibits government social welfare entities such as GSIS, SSS, PhilHealth, Pag-IBIG, OWWA, and PVAO fund from buying shares in the Maharlika Investment Corp. (MIC), which are supposed to be allocated for its contributors, the Filipino people,” Tulfo said.

He added that it would allow investment to come from private sectors, “without giving up ownership and control.”

“The purpose of the amendment is to ensure that the ownership of the MIC shall by exclusively with the government, including the GOCCs and instrumentalities. This is consistent with sovereign wealth funds that they are owned and managed by the government alone,” Tulfo explained.

The planned Maharlika fund previously received an uproar from several groups after an initial proposal sought to tap Filipinos’ pension funds.

Meanwhile, Sen. Sherwin Gatchalian proposed to drop the Bangko Sentral ng Pilipinas (BSP) dividends as one of the sources of MIC’s capital.

Gatchalian defended his proposal, saying it was “to ensure that the BSP's increasing capitalization will be fully realized at the earliest possible time, to strengthen the institution given the growth of the banking industry through the years, this is also to maintain the credibility of the BSP.”

“Diverting the funds, which were supposed to fund the capitalization of the MIC, will set a bad precedent for future legislation when BSP is involved,” he added.

Gatchalian said the government must ensure the central bank’s financial position “remains sound.”

Villar, however, rejected the proposed amendment.

“The BSP has already said that they're willing to defer. The economic team has really expressed that the dividends -- it's a priority for them that the dividends received from BSP be used for the MIC. So I do not accept the amendment,” Villar said.

Under the Senate version of the bill, the MIC will also undergo a "special audit" by the Commission on Audit every five years.

Sen. Grace Poe proposed an amendment to require the MIC to submit a "quarterly confidential submission" of all investments, whether planned or under negotiation, to the oversight committee.

The amendment was denied by the Senate, saying it may "move the markets" if the public sees what companies choose to invest in the fund.

Penalties for MIC employees, directors, and officials found guilty of misuse of funds, graft, and corruption have also been increased under the Senate’s final version, even way higher than those in the lower chamber’s version, House Bill No. 6608.

Under Senate Bill No. 2020, any individual who allows being used for corrupt practices by directors and employees of the MIC would be penalized with ₱1 million to ₱5 million and imprisonment of six years.

A director or officer of the MIC who fails to report any corrupt practices would likewise face a fine of ₱5 million to ₱10 million, with imprisonment of 20 years and perpetual disqualification from holding public office.

Sen. Risa Hontiveros’ request to state minimum years for imprisonment was also accepted by the Senate.

The Senate also accepted the proposal to allow foreigners to sit on the MIC board.

Sen. Robin Padilla's proposal to implement the measure right after it is published in the official gazette and any national newspaper was likewise accepted. There will also be a Filipino version of the measure as proposed by the senator.

Some provisions in the Senate version differ from those in the version of the House of Representatives. Congress may adopt the Senate version or a Bicameral Conference Committee is called to reconcile conflicting provisions of both versions before the measure is ratified and submitted to Malacañang.

A lawmaker said the House is "very eager" to receive the Senate version of the MIF bill and is looking forward to ratify it before Congress' sine die.

Last effort to delay

Before the bill was approved on second reading, Hontiveros tried to delay the voting as Pimentel was unable to present his proposed amendments and manifestations.

Zubiri, however, said the next session is allotted for the Bicameral Conference Committee meeting.

"There's already a time for the Bicameral Conference Committee [hearing] tomorrow at 11. The House already elected its members and they're just waiting for the bicameral conference committee to be constituted by the Senate," Zubiri said.

"And I don't think these people here will be here tomorrow. It would probably just be me, Sen. Joel, and you left," he added.

Zubiri also said the Senate version of the bill already "satisfies the thirst for transparency and accountability on the measure."