By Nikolai Ordoña 

The Maharlika Investment Fund (MIF) bill was signed into law on Tuesday, July 18, more than seven months after being first introduced in the legislative branch.

President Ferdinand Marcos Jr. signed Republic Act 11954 at the Kalayaan Hall in Malacañang Palace, with members from both the Senate and House of Representatives in attendance.

The first sovereign fund in the history of the Philippines, President Marcos described it as an “extremely important measure” and a “bold step” in strengthening the country’s economy, especially after the pandemic.

“Through the fund, we will leverage on a small fraction of the considerable but underutilized investable funds of the government and stimulate the economy without the disadvantage of adding additional fiscal and debt burden,” he said.

Senator Mark Villar called the MIF a “historic legislation”, while Deputy Speaker Gloria Macapagal Arroyo hailed its passage as a “very big milestone” for the country’s economy.

The MIF is a Sovereign Wealth Fund (SWF), a state-owned investment fund typically financed by a country’s surplus revenues or reserves. It is used to stabilize national budgets and promote economic development. 

Patterned after the SWF of 49 other countries, such as China, Hong Kong, South Korea, and Malaysia, the MIF is expected to foster economic growth, finance infrastructure projects to improve connectivity, and attract foreign investment.

“A bad decision”

The MIF received major support from the legislation and the President, who declared the bill urgent. However, some officials and groups expressed concern about the fund, citing that the government must first address the country’s inflation rate and increasing debt.

Senate Minority Leader Aquilino “Koko” Pimentel had called on the President to veto the measure, saying that the law would divert resources that could have been used to solve immediate issues such as gaps in education and healthcare.

He also questioned its constitutionality after Senate President Juan Miguel Zubiri revealed that some senators made corrections to the bill through their Viber group chat prior to being submitted to the President. Zubiri, on the other hand, said that the changes were just a “typo error”.

“The MIF is a bad idea, a bad decision, a bad act,” Pimentel said, who called its signing a “sad day in the history of our country.”

“Ang national budget ang unang magiging biktima ng Maharlika Fund,” Senator Risa Hontiveros, one of the seven legislators who opposed the bill, also stated.

Economists from the University of the Philippines, including Former National Economic and Development Authority Secretary Ernesto Pernia, earlier published a paper titled “Maharlika Investment Fund: Still Beyond Repair”, calling on Marcos Jr. “to seriously reconsider” signing the MIF.

“We find that the MIF violates fundamental principles of economics and finance and poses serious risks to the economy and the public sector — notwithstanding its proponents’ good intentions,” the economists said.

Nevertheless, President Marcos believes that the key to the success of the MIF is through its management, assuring that it will be led by “the best economic managers” from the government and the private sector that the country can count on.

“At its core, the MIF carries the dreams and aspirations of the Filipino people, our citizens who strive for a better future for themselves, their loved ones, and their communities,” the President said.

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