Philippines revises wealth fund rules, giving Marcos Jnr power to decide board members
- Revised rules empower president Marcos Jnr to accept or reject nominees for executives and members of the firm managing the fund
- Critics fear the fund could be prone to misuse, and point to Malaysia’s 1MDB scandal as an example
The presidential communications office on Saturday 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 Jnr suspended implementation of the Maharlika Investment Fund (MIF) 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 this 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 (US$8.96 billion) worth of preferred and common shares which the government, state-run firms and banks can purchase.
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 multibillion-dollar corruption scandal.
