Search for Maharlika fund managers due end-September

Metro Manila (CNN Philippines, August 30) — The implementing rules for the law that created the Philippines’ first sovereign wealth fund are out, setting in motion the search for the top executives that will manage the fund.

The rules for the so-called Maharlika Investment Fund (MIF) Act, or Republic Act 11954, take effect on Sept. 12.

It stated that the nomination and application period should be closed no longer than 15 days after the date of effectivity, setting an end-September deadline.

The Department of Finance was mum when asked if a roster of nominees or applicants has already been readied.

According to the rules, the names should be submitted to President Ferdinand Marcos Jr. in mid-October by an advisory board that consists of the heads of the Department of Budget and Management, the National Economic and Development Authority, and the Bureau of Treasury.

While the advisory board screens and vets the nominees or applicants, the president still has the final say on appointments.

The vacancies are for the president and CEO, two regular directors, and three independent directors. They join a nine-person board who will be deciding how to manage the fund through a company called the Maharlika Investment Corporation.

The board will have Finance Secretary Ben Diokno as the chairman, while the other board members are the CEOs of the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines – two state-run lenders that have initial contributions to Maharlika’s seed money.

DBP and Land Bank will put in an initial P25 billion and P50 billion, respectively, to the Maharlika Investment Corporation, which under the law has an authorized capital of P500 billion.

The rest of the capital will come from the national government through dividend contributions from the Bangko Sentral ng Pilipinas, a portion of the income of PAGCOR and other gaming operators, royalties and sale of state-owned assets.

Private funds and wealth managers can buy shares in Maharlika Investment Corporation as the rules provide that of the P500-billion authorized capital, P125 billion are preferred securities or non-voting shares through which these private institutions can subscribe.

The rules reiterated the law’s provision that pension funds Social Security System and Government Service Insurance System, as well as the PhilHealth and other state-run pension funds, are banned from buying shares in the Maharlika corporation. They cannot invest in the Maharlika fund either.