Page last updated at 04:03 UTC, Sunday, 16 July 2023 PH
Upon reading Senate Bill (S. B.) 2020, An Act Establishing the Maharlika Investment Fund (MIF) Providing for the Management, Investment, and Use of the Proceeds of the Fund, and For other Purposes, I can emphatize with the many remaining critics of the proposed law. Except for the absolute prohibition for government agencies and GOCCs providing for the social security and public health insurance of government employees, private sector workers and employees, and other sectors and subsectors to contribute to the capitalization of the Maharlika Investment Corporation (MIC), the proposed law is so all encompassing that it seems to cover everything under the Philippine investment sun. I can understand why the economists from the U.P. School of Economics referred to the MIF as having “confused goals” and is “defective and poses a serious threat to the country’s economy.” The statement of objective found in Sec. 13 of Article III of the Bill seems to deserve the U.P. economists’ criticism as reflecting “amorphous development goals and speaks of development only in the broadest possible terms.”
Should the bill go beyond mouthing motherhood statements like “The objective of MIF is to promote socio-economic development. This will be achieved by making strategic and profitable investments in key sector to preserve and enhance long-term value of the Fund; to obtain the optimal absolute return and achievable financial gains on its investment; and to satisfy the requirement of liquidity, safety/security, and yield in order to ensure profitability. In pooling the investible fund from the GFIs, and channeling them to diversified financial assets and development project, the MIC’s activities shall contribute to a prudent and a transparent management of the government resources.” Aren’t these words generic enough to apply to any financial institution that can be put up by the Government. Can’t they be applied to the Land Bank, Development Bank of the Philippines and any other Government Financial Institution with the slightest tweaking of their respective mandates?
When I read the Senate bill, I remembered the dozens upon dozens of Articles of Incorporation and By-Law I have read in my professional career as a business economist and management consultant. I am so used to the wordings of Articles of Incorporation of leading business enterprises that also seem to have amorphous and confused goals, that also seem to want to cover everything under the economic sun. One can read the Articles of a mining company also including the possibility of going into real estate, educational institutions, hospitals, etc. Or a real estate company stating that it may also consider going to food processing, logistics and tourism. I have learned not to identify the nature of an existing company by reading its Articles of Incorporation which are intentionally written in the broadest manner possible to meet future contingencies. When I want to know what is the true nature of any given business enterprise, I ask for the documents laying out the results of its most recent Strategic Planning Exercise in which it articulates it Mission, Vision, Long-Term Strategic Plan, Medium-Term Capital Budgeting Plan and short-term operational plan. The Senate Bill can be considered as the Articles of Incorporation of the Maharlika Investment Corporation, no more no less.
The MIF is structured as any business corporation in the private sector. Its goals have been stated in the broadest way possible for flexibility. But what it will actually do in practice will be contained in its mission and vision statement and the actual formulation of a strategic business plan. These are the elements that the suspicious, wary doubting Thomases should be watching with hawk’s eyes, using the provision of Section 39 , Article VIII of the Senate Bill which states that “all documents of the MIF and MIC shall be open, available and accessible to the public, as may be allowed by law, in both English and Filipino, including but not limited to (a) All investments thereof, by the MIC and on the portfolio of the MIF; (b) The statement of assets and liabilities (SALNS) of the members and officials of the Board of Directors, Risk Management Committee, and Advisory Body; (c) The SALNS of those who appointed and designated the said members; and officials; (d) Audit documents from the COA; and (e) Similar documents and information. Transparency is further guaranteed when there is a provision under Sec. 40 of Article VIII that all reports of the MIC pursuant to the disclosure rules under existing laws shall be published on its website that shall be immediately updated and made easily accessible to the public.
Without being presumptuous, let me suggest to the future management and board of directors of the MIC a sample strategic planning exercise that they may want to consider to make the nature of their business less ambiguous, confused and amorphous. After listening to President BBM and Finance Secretary Benjamin Diokno repeatedly referring to wanting the MIC to be an instrument for increasing significantly investments in vital infrastructures and attracting bigger volumes of Foreign Direct Investments, let me suggest that the Vision of the MIC be a Philippine economy with the most modern infrastructures that can serve the needs of the major sectors of agriculture, industry and services. This focus of the MIC on infrastructures will address the criticism of “confused and amorphous goals.” It will also address the most pressing needs of the economy to grow at a faster rate of 8 to 10 % which will surely help to generate more employment and reduce poverty to single-digit levels by the end of the present Administration. In fact, I would even narrow the scope to investments in infrastructures in transport, telecommunications, renewable energy and large-scale agribusiness.
The sorry state of our infrastructures was again highlighted by the 2023 World Competitiveness Yearbook of the Switzerland-based Institute for Management Development (IMD) which downgraded the quality of Philippine infrastructures. As Calixto V. Chikiamko, President of the Foundation for Economic Freedom (FEF) remarked, the decline in competitiveness in the infrastructure factor was not a surprise. No objective observer can disagree with his comments that in the Philippines, “infrastructure remains poor and inefficient, like the Ninoy Aquino Airport. Power availability is uncertain. Water will be rationed. The poor infrastructure and services are turning off investors.” The ordinary traveler does not even have to read reports of think tanks like the IMD. He just has to travel to our neighboring countries like Singapore, Taiwan, Hong Kong and South Korea to realize how far behind we are in the quality of our infrastructures.
What about the possible Mission of the MIC? In my opinion, it is to do everything possible to attract billions of dollars of FDIs into the three sectors of infrastructures, renewable energy and large-scale agribusiness ventures. This is very consistent with the untiring efforts of President BBM to woo foreign investors from the very beginning of his Presidency as he travelled from one country to another marketing the Philippines as an attractive country for foreign investors. His efforts should be supported by an instrument like the MIC that can help actualize into concrete dollars and projects the numerous pledges and promises to invest that the President has received from the foreign investors he met. To be continued.