Philippines releases revised rules on sovereign wealth fund

THE presidential communications office on Saturday (Nov 11) released revised rules for the Philippines’ first sovereign wealth fund, with changes to include granting powers to the president to accept or reject an advisory board’s nominations for top officials.

Last month, President Ferdinand Marcos Jr suspended implementation of the Maharlika Investment Fund to ensure transparency and accountability in the fund’s management.

Rosalia de Leon, the country’s central bank monetary board member and former treasurer who was part of the review group, was quoted in the statement as saying Marcos sought the changes to ensure the fund is “insulated from political influence and considerations and would like to give the leeway to set the qualifications”.

The revised rules empower Marcos to accept or reject nominees for president and chief executive officers, and regular and independent members of the Maharlika Investment Corp, which will manage the fund, the statement said.

Philippines Finance Minister Benjamin Diokno told the Reuters Next conference in New York last week that the sovereign wealth fund will be fully operational by the end of the year, with an initial capitalisation of around US$2 billion.

Under the law, the fund would issue up to 500 billion Philippine pesos (S$12.2 billion) worth of preferred and common shares which the government, state-run firms and banks can purchase.

SEE ALSO

Top Abu Dhabi wealth fund taps Manulife exec for US real estate

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

The Philippines is relatively late in setting up a sovereign wealth fund in the region, with neighbouring Indonesia launching its fund in 2021, and Singapore long having established one.

Critics fear the fund could be prone to misuse. The sovereign wealth fund of neighbouring Malaysia, 1Malaysia Development Berhad, was engulfed in a multi-billion dollar graft scandal.