With the recent deposit made by Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) of P50 billion and P25 billion, respectively, to the Maharlika Investment Fund (MIF) as its initial capital, all that remains to get it going is the appointment of its directors and president and chief executive officer (PCEO).In light of the controversy that the creation of the MIF had generated, the business community is expected to take a close look at the credentials of the PCEO (who is also a director) and the three independent directors from the private sector who will sit in the nine-person board of directors.
The rest of the directors are the secretary of finance (who will act as its chair), the presidents of Landbank and DBP, and two regular directors who may or may not be connected with the government.
It would be up to the shareholders to decide who they want to sit in the board as regular directors. Considering the perks that accompany that position, there would be no dearth of interested parties.
The three independent directors would be tasked with, among others, presenting the views or position of the business community on the investment policies or decisions of the MIF.
Their credibility and qualification would be enhanced if they are not engaged in businesses that are highly regulated by the government or may profit from possible investments in them by the MIF.
A high level of expectations from the public awaits the MIF. A survey conducted earlier this year by Social Weather Stations showed that at least 46 percent of adult Filipinos foresee a lot of benefits from it.
That should not come as a surprise in light of the MIF proponents’ strong statements about it being a catalyst for national growth and development, and that the safeguards laid down in its charter would prevent it from going the way of other sovereign funds that were marked by corruption and mismanagement.
That assurance is significant considering that, in the absence of private investors, the MIF’s funding source would primarily be billions of pesos in taxpayers’ money.
This early, the rosy forecast about the MIF may already be putting pressure on the people who would be managing it. They would, in a manner of speaking, be doing their work inside a glass bowl, with the business community (and the critics of the fund) closely monitoring their activities.
Although as a rule, discussions on investments by financial institutions should be kept within the four corners of the boardroom, that practice may have to be relaxed in the MIF’s case in the name of transparency in government transactions.
Thus, the MIF executives may have to come up with a scheme that would balance the need for maintaining confidentiality in their activities with the right of the public to know how their money is being managed to meet the objectives of the fund.
Following standard business practice, expect the MIF’s “balance sheet” to be asked to be publicly disclosed after a year of operation, and every year thereafter, so the public can take a look at it.
And when that paper comes out, the traditional and social media would have a field day scrutinizing it line by line and giving all kinds of comments on how some items in it should have been handled. Instant experts are a dime a dozen in this country.The public’s expectations about the MIF have to be tempered. It is not a silver bullet that would put an end to the country’s economic problems once it becomes operational.
As DBP president Michael de Jesus had earlier said, the gains from the MIF could be seen in four to five years, or by the end of the term of President Marcos in 2028.
If it’s any consolation, Mr. Marcos had said in his speech in Singapore last week that the MIF would be run by professional fund managers and that he would not let politics get in its way. INQ
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