Unveiling the Maharlika Investment Fund: A Promising Yet Challenging Endeavor


By Mario Amora Estella


On July 18th, a groundbreaking legislation was signed into law, giving rise to the Maharlika Investment Fund (MIF). Heralded as a transformative initiative with the potential to shape the economic landscape of the nation, the MIF aims to foster sustainable development, infrastructure advancements, and job creation in the Philippines. However, amid the hopeful prospects, there looms a grave concern: the specter of corruption.

The Maharlika Investment Fund represents a visionary attempt by the government to mobilize financial resources for strategic development projects across the archipelago. It is intended to attract both local and foreign investors, who will pool their funds into the fund. The funds will then be directed towards various high-impact projects that align with the country’s development goals, covering areas such as transportation, energy, education, healthcare, and technology.

By setting up the MIF, the government seeks to channel investment into vital sectors, propelling the country’s progress, and ultimately improving the quality of life for its citizens. If successful, this initiative could create a virtuous cycle of economic growth, attracting further investments and propelling the Philippines towards becoming an economic powerhouse in the region.

Nonetheless, the MIF faces an undeniable nemesis: corruption. As history has repeatedly demonstrated, ambitious projects involving vast sums of money can be susceptible to misuse, embezzlement, and graft. Corruption not only siphons off funds meant for public welfare but also hampers progress, leads to shoddy infrastructure, and undermines public trust in government initiatives.

The threat of corruption, if not adequately addressed, poses a severe challenge to the operationalization of the MIF. Therefore, robust measures must be put in place to safeguard the fund and its resources.

  1. Transparency and Accountability: A fundamental pillar in the fight against corruption is transparency. The MIF should adopt stringent reporting and disclosure mechanisms, ensuring that all financial transactions and project decisions are open to public scrutiny. Additionally, an independent auditing body should be established to monitor the fund’s activities and ensure accountability at all levels.
  2. Stringent Legal Framework: The legislation that brought the MIF into existence should include strict anti-corruption provisions. It should outline severe penalties for any individual found guilty of engaging in corrupt practices related to the fund. Furthermore, whistle-blower protection must be granted to encourage insiders to come forward with evidence of wrongdoing.
  3. Independent Oversight Committee: Aside from the Law’s Maharlika Investment Fund Joint Congressional Oversight Committee (MIF-JCOC), an impartial oversight committee should be formed, comprising individuals with a strong track record of integrity and expertise in finance, law, and governance. This committee would act as a check on the fund’s operations, ensuring that decisions are made with the country’s best interests in mind.
  4. Technological Solutions: Embracing cutting-edge technologies like blockchain could enhance the fund’s transparency and traceability. Blockchain’s immutable nature can ensure that transactions are tamper-proof and publicly verifiable, reducing the potential for corruption.
  5. Public Participation: Encouraging citizen engagement and participation can act as a powerful deterrent against corruption. By actively involving the public in the decision-making process and project oversight, the MIF can leverage collective vigilance to detect and prevent corrupt practices.

The MIF’s success hinges on the government’s commitment to eradicating corruption and fostering a culture of accountability. While ambitious in its scope, the realization of the fund’s objectives will demand unwavering dedication to integrity, supported by effective governance and legal structures.

It is essential to remember that the MIF is not an isolated entity; it represents the collective aspirations of the Filipino people. As it moves towards operationalization in early 2024, the nation must unite in its resolve to combat corruption, for only then can the Maharlika Investment Fund truly fulfill its potential as a catalyst for transformative change and sustainable growth in the Philippines.

According to a release from the Presidential Communications Office, PBBM stated at the signing ceremony for Republic Act No. 11954 (MIF Act) on July 18 that “The MIF (Maharlika Investment Fund) is a bold step towards our country’s meaningful economic transformation.” According to the official statement, MIF has the ability to channel in foreign financing, lessening the strain on the government to finance infrastructure through borrowing and taxation.

According to reports, the Government Pension Fund of Norway’s sovereign wealth fund lost $174 billion in the first half of 2022, while Temasek Holdings, which is primarily regarded as a sovereign wealth fund, has seen a net loss of S$7.3 billion throughout the nearly 50 years since its founding. It serves as a warning for the Philippines. The issue is whether creating MIF is appropriate.

It appears impossible to stop the MIF from becoming corrupted. A business entity called the “Maharlika Investment Corporation” (MIC) will be established in accordance with the MIF Act and run by a board of directors who are all presidential appointees. In our nation, where nepotism is rife, it is predicted that if the President picks people based on favour rather than talent, it would result in a significant lack of transparency in regulation and a high risk of financial embezzlement. In the meantime, it’s important to remember that the MIF could be a weapon for politicians to steal from the public coffers. In 2018, Jose Filomeno dos Santos, the former chairman of the national sovereign wealth fund and the son of former Angolan President Jose Eduardo dos Santos, was charged with theft of $1.5 billion. Another cautionary story is the well-known 1Malaysia Development Berhad (1MDB) situation from our neighbor Malaysia. In 2015, it was revealed by Sarawak Report and The Wall Street Journal that Malaysia’s then-Prime Minister Najib Razak had transferred more than RM 2.67 billion (or roughly US$700 million) from 1MDB into his personal bank accounts. Additionally, the Marcos family is still the target of numerous cases involving ill-gotten money.

There should be a warning that the MIF might be used by the US as a means of financial pressure on our nation. There are indications that MIF is connected to the US. The MIF Bill was firstly signed in the US. During his working visit to the Philippine Embassy in the US on June 21, Senate President Juan Miguel Zubiri reportedly signed a “enrolled” copy of the MIF. Jose Manuel Romualdez, the Philippine ambassador to the US, was present for the signing. 

Why was the Bill signed at that precise time, when Zubiri was visiting the US? The second is MIF-specific PR company campaigns, particularly in the US. A $1 million PR contract between the Department of Finance and Weber Shandwick (WSP), a global PR firm with US headquarters, was signed in early January 2023, according to a source at WSP. The US was designated as the top campaign market in the PR strategy to draw US investment. Amb. Romualdez has long held the positions of chairman and CEO at WSP. Amb. Romualdez used his connections in government to assist WSP in obtaining the MIF PR contract. Then, WSP developed a PR strategy to decrease misconceptions about MIF, particularly those pertaining to abuse and corruption, and to raise awareness of it as an instrument for economic development that will support fiscal stability. The third is that MIF management and investment may be subject to US intervention. DBM Sec. Amenah F. Pangandaman stated on April 19 that several US corporate organizations and investors are eager to assist us in structuring the MIF.

Rockefeller family interest in the proposed MIF has been observed. Will MIF profit from US investment? We might be able to learn anything from the 1MDB situation. For 1MDB, which was founded in 2009, Goldman Sachs Group, Inc., a top global investment banking, securities, and investment management firm, raised $6.5 billion in 5 years.  Goldman Sachs admitted during the investigation after the 1MDB scandal broke that it had stolen $1 billion from 1MDB to bribe officials in Malaysia and other nations, including by paying for the extravagant lifestyles of Malaysian officials and purchasing luxury yachts and hotels for them. Officials from Goldman Sachs received $4.5 billion in bribes and kickbacks, which they pocketed. Roger Ng, a former Goldman Sachs banker, was found guilty on April 8th, 2022, and given a 10-year prison term for his role in the massive 1MDB money theft.

US Treasury bonds may be purchased using MIF. The MIF Act states that the Board of Directors of the MIC may invest in fixed income securities issued by sovereign, quasi-sovereign, and supranational entities as well as local and international business bonds. If MIC demonstrates a bias for US bonds, it would be disastrous. Against the backdrop of the US dollar’s declining credibility and the closure of Silicon Valley Bank and Signature Bank, investors drastically decreased their purchases of US bonds. Japan and China, the top two global holders of US national debt, decreased their holdings of US treasury bonds by $224.5 billion and $173.2 billion, respectively, in 2022, according to data from the US Treasury Department for 2023. Ireland, France, Brazil, Israel, and many more nations have sold a significant quantity of US treasury bonds since last year. It is not a good idea to invest in the US market at the moment.

If an influx of US capital pours into the Philippines, where corruption and a lack of effective regulation are rampant, a scandal similar to the 1MDB case is likely to occur. The wealth of our country might be pillaged in that scenario. Other internal affairs and our economic backbone could be hampered.

The “Maharlika Investment Fund Act of 2023,” furthermore, seems to suffer from some very basic and uncorrectable serious flaws.

The Maharlika Investment Fund Act of 2023 which is actually Republic Act No.  11954 was most recently copied from House Bill No. 530 filed in the 18th Congress by Cong. Joseph Stephen S. Paduano on July 1, 2019 entitled, “An Act Creating the Overseas Filipino Workers (OFW) Sovereign Fund.”  This bill was substituted by House Bill No. 7802.  This is covered by Committee Report No. 542 which was submitted by the Committee on Overseas Workers Affairs and the Committee on Ways and Means to the Bills and Index Service of the House of Representatives on September 30, 2020 and whose primary sponsors on record are Congressmen Raymond Democrito C. Mendoza, who, at that time was the Chairman of the Committee on Overseas Workers Affairs, Joseph Stephen S. Paduano, who was the original author of House Bill No. 530, and, for formality’s sake, Joey Sarte Salceda, because the bill had a provision which touches on “Ways and Means” and Cong. Salceda happened to be, at that time, the Chairman of the Committee on Ways and Means.

Almost all Sovereign Funds source their funding from the earnings from natural resources like oil, natural gas, minerals, and others, or, in the unique situation of the Philippines and other labor-exporting countries, from the foreign exchange (mostly U.S. dollar) remittances of their overseas workers like that provided for by House Bill No. 530 of Cong. Joseph Stephen S. Paduano.

Usually, Sovereign Funds are created so that the never-limitless and exhaustible earnings from natural resources, or from the foreign exchange remittances of the  overseas workers of concerned countries, are saved and preserved and used for industrialization, so that when these earnings stop or are no more, countries like the Philippines can then have the capacity and capability to convert their natural resources into finished products and earn instead from industrialization and the export of finished products rather than from exporting mere “low-grade” labor and/or raw, unprocessed natural resources. 

This was successfully done by South Korea in the 1970s and the 1980s when it used the remittances of its overseas workers to build the basic blocks of industrialization like its own military-industrial complex, nuclear power plants, shipyards, car manufacturing, computer manufacturing, electronic chip-making, and cellphone and other electronic products’ mass production and fabrication for export to the whole world.  This is why today, South Korea no longer exports mere manpower and raw, unprocessed natural resources but finished products.  Instead of mere “low-grade” manpower, South Korea now has expatriates like civil engineers, railroad engineers, computer engineers, etc. of its “chaebols” supervising constructions, and exportations of various finished products by South Korean government-owned and private corporations in many countries all over the world. This is detailed in the book, “Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism” by South Korean economist Ha-Joon Chang who is a protégé of Nobel Prize–winning economist Joseph Stiglitz.

This is the inspiration behind the bill filed by nationalist and patriotic Cong. Joseph Stephen S. Paduano whose vision is to have a country that no longer “exports” human beings and raw, unprocessed natural resources but finished products through nationalist industrialization.

However, House Bill No. 530 filed in the 18th Congress by Cong. Paduano on July 1, 2019 entitled, “An Act Creating the Overseas Filipino Workers (OFW) Sovereign Fund” and which was substituted by House Bill No. 7802 and covered by covered by Committee Report No. 542, was copied and replaced by what is now “The Maharlika Investment Fund Act of 2023” or Republic Act No. 11954 whose funding source is no longer any “sovereign wealth” from the remittances of overseas workers nor from the earnings from the exports of raw, unprocessed natural resources but from taxpayers’ money and government or public funds.

It is interesting to note that this goes against the basic sound principles enunciated by the father of Pres. Ferdinand “Bongbong” R. Marcos, Jr. – the late Pres. Ferdinand Edralin Marcos, Sr. – in his Presidential Decree No.  477 or “The Decree on Local Fiscal Administration.”  Although this is for local government units (LGUs), the said principles are actually much more needed to be applied to the national government in order to avoid the misuse or corruption in the use of hard-earned taxpayers’ money and government or public funds which belong to all the Filipino people and not to any personality in government and/or the private sector.

Section 2 or the “Fundamental Principles” of P.D. No. 744 clearly and specifically mandates that “Local government financial affairs, transactions, and operations shall be governed by the fundamental principles set forth hereunder” as follows:

(a)    No money shall be paid out of the treasury except in pursuance of a lawful appropriation or other specific statutory authority.


(b)    Public funds and monies shall be spent SOLELY for public purposes.


(c)     Revenue is obtainable only from sources expressly authorized by law and collection thereof shall at all times be acknowledged properly.


(d)     ALL monies officially received by a public officer in any capacity or upon any occasion shall be accounted for as GOVERNMENT funds, except as may otherwise be specifically provided by law or competent authority.


(e)    TRUST FUNDS shall not be paid out of the treasury except in fulfillment of the purpose for which the trust was created or fund received.


(f)    EVERY officer of the government whose duties permit or require the possession or custody of government funds shall be properly bonded and such officer shall be accountable and responsible for said funds and for the safekeeping thereof in conformity with the provisions of law.


(g)    Local governments shall formulate sound financial plans and the local budgets shall, by and large, be based on functions, activities, and projects, in terms of expected results.


(h)    Fiscal responsibility shall, to the greatest extent, be shared by ALL those exercising authority over the financial affairs, transactions and operations of the local governments.

Section 42 of P.D. No. 744 also commands, orders and mandates a strict    “Prohibition against expenditures for religious or PRIVATE purposes” as follows:

“No public money or property shall be appropriated or applied for the benefit of any religious sect or activity nor any other undertaking or purpose of a PRIVATE character.

All these much-needed basic principles to ensure that the hard-earned money of taxpayers and the Filipino people and government or public funds are not lost to private persons and corporations, it seems, are now done-away with under rushed “Maharlika Investment Fund Act of 2023” or Republic Act No. 11954.  Among many other defects, this Act now allows public money or property to be appropriated or applied for the benefit of, or undertakings, whose purpose is PRIVATE in character which means that it now allows the hard-earned money of taxpayers and the Filipino people and government or public funds to be used by PRIVATE persons and entities for the latter to earn money, interests, dividends, etc. for themselves out of the aforesaid “hard-earned money of taxpayers and the people and funds owned by the government (i.e., the Filipino people) or the PUBLIC.

It truly baffles and makes everyone wonder why, instead of using the earnings from the exports of raw, unprocessed raw materials and natural resources and/or remittances of overseas workers as “sovereign funds” usually and regularly source their fund from, the present Marcos, Jr. Administration is now using the hard-earned money of taxpayers and the Filipino people and government or public funds to “invest” in PRIVATE entities and corporations which may not even be Filipino ones but FOREIGN!!!  This goes against all basic sound principles of safekeeping the hard-earned money of taxpayers and the Filipino people and government or public funds as enunciated by the father of Marcos, Jr. himself – Pres. Ferdinand Edralin Marcos, Sr. in his P.D. No. 744.

Who are these lucky and privileged PRIVATE entities and/or corporations, and individuals in them, who will earn and benefit out of the hard-earned money of taxpayers and the people and funds owned by the government (i.e., the Filipino people) or the PUBLIC?

Furthermore, by using the hard-earned money of taxpayers and the Filipino people and government or public funds (which are lodged in various government-owned and/or controlled corporations or GOCCs) to “invest” in PRIVATE entities and corporations which may not even be Filipino ones but FOREIGN, the government will no longer receive the same amount of remittances from these government-owned and/or controlled corporations because the latter will now instead use their PUBLIC funds to infuse into “The Maharlika Investment Fund.”  What does this mean? This means that the national government will be deprived of funds and may be forced to borrow money and pay interests for this borrowed money. The interests on these borrowings may even be bigger than the “earnings” that will be “received” by the national government from the “Maharlika Investment Fund,” thus defeating the whole purpose of the MIF which is “to earn money for the national government”!  The net effect may even be negative or a deficit!

The funds from the remittances of dividends and other earnings of GOCCs which heretofore were used to help the poor and the needy, will now likewise go to the MIF and its PRIVATE “beneficiaries” which will make our less-fortunate countrymen bereft of any assistance from the national government.  In effect, what otherwise are PUBLIC funds can now be “legally” PRIVATIZED under the MIF, may be not in whole, but in part because the PRIVATE entities, corporations and individuals who will “help earn” money for the government will surely have their “cut” or “commissions” for doing so, otherwise why will they do it in the first place?

The last paragraph of Section 6 of the MIF Law states that “The 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 such as, but not limited to, the SSS, GSIS, PhilHealth, Pag-IBIG Fund, OWWA, and PVAO Pension Fund shall be absolutely prohibited, whether mandatory or voluntary, to contribute to the capitalization of the MIC (Maharlika Investment Corporation).”

Therefore, the funds PRIVATELY-OWNED by workers and employees (according to several Supreme Court and Commission on Audit decisions) who are PRIVATE members and contributors of the SSS, GSIS, PhilHealth, Pag-IBIG Fund, OWWA, and PVAO Pension Fund, among others, may still be technically used to infuse funds in the MIC as long as these funds PRIVATELY-OWNED BY WORKERS AND EMPLOYEES are not used to “capitalize” the MIC but merely to infuse funds into the MIC.  This may be tantamount to confiscation, or at the very least “diversion,” by the government of the funds PRIVATELY-OWNED BY WORKERS AND EMPLOYEES in the SSS, GSIS, PhilHealth, Pag-IBIG Fund, OWWA, and PVAO Pension Fund, among others, without any due process of law.  This very important matter must be clarified as soon as possible by a Supreme Court decision.

The corporation known as the “MIC” has also become a government within the government by arrogating unto itself the power to borrow money from local and FOREIGN sources, which of course, if worse comes to worst, will be paid by the hapless and helpless Filipino people as we can see in the MIF Law’s Section 10 as follows:

“SEC. 10. Issuance of Bonds. — The MIC may issue all kinds of bonds, debentures, and securities, and/or the renewal or refunding thereof (hereinafter called ‘Bonds’), within and/or outside the Philippines, at such terms, rates, and conditions as the Board of Directors may determine, subject to compliance with the provisions of applicable law, and rules and regulations promulgated by the Monetary Board.”

Indeed, the whole sovereignty of the people (Article II or the Declaration of Principles and State Policies, under “Principles,” of the 1987 Constitution states that, “Section 1. The Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them.”) seems to have been transferred to this very powerful cabal of personalities in the MIC which can borrow money from local and FOREIGN sources without even bothering to consult the helpless and hapless Filipino people who, may, in the end, as usual, pay for these debts!

The last paragraph of the Law’s Section 12 states that “The Fund shall be used to invest on a strategic and COMMERCIAL basis” – which indeed highlights the commercialization of PUBLIC funds contrary to all norms of the safekeeping of PUBLIC funds since our Republic was founded in 1898!

The all-powerful “Advisory Body” mentioned in Article I or the “Definition of Terms” of the MIF Law is rather vague and what we can gather from the Law about this “Advisory Body” is the following, and yet it is very, very powerful body under the Act:

“SEC. 3. Definition of Terms. — The following terms as used in this Act and the implementing rules and regulations shall be understood as follows:

“(a)     Advisory Body refers to the body established under this Act which shall provide GUIDANCE, COUNSEL AND ADVICE TO THE BOARD OF DIRECTORS of the Maharlika Investment Corporation, and ALL OTHER FUNCTIONS AS PROVIDED FOR IN THIS ACT;”

This “Advisory Body,” which is very, very powerful, is composed of only three (3) persons, as quoted in this Section of the Law:

“SEC. 27. Advisory Body. — An Advisory Body is hereby created which shall be composed of the Secretary of the Department of Budget and Management, the Secretary of NEDA, and the Treasurer of the Philippines.”

It is likewise interesting to note in the MIF Law’s Article IV on “Investments” that the word “may” is used instead of the word “are” as highlighted and underlined below which means that those that are NOT necessary nor contributory to the economic development of the country, or NOT important to the public interest CAN  still be invested in or upon, as you can see below:

“SEC. 14. Allowable Investments. Subject to strict compliance with the Investment and Risk Management Guidelines, the Board of Directors of the MIC may engage in the following investments:

“(j)      Loans and guarantees to, or participation into joint ventures or consortiums with Filipino and foreign investors, whether in the majority or minority position in commercial, industrial, mining, agricultural, housing, energy, and other enterprises, which MAY be necessary or contributory to the economic development of the country, or important to the public interest;”

Any Tom, Dick and Harry can work for the MIC in a TEMPORARY capacity which is rather very dangerous for a supposedly “squealy-clean” corporation such as the MIC. We all know that temporary “non-executive personnel” who can be “terminated anytime at the pleasure of the appointing officer/authority” can be easily tempted to engage in illegal money-making activities. But why is this allowed by the MIF Law’s Section 31, to wit:

“SEC. 31. Designation and Secondment. — For the first five (5) years of its operations, the MIC Board, upon the recommendation of the P CEO, shall authorize GFI non-executive personnel to the MIC, as may be necessary, subject to existing guidelines on secondment of the Civil Service Commission.

“The designation of the respective GFIs’ personnel to the MIC involves the imposition of additional and/or higher duties to be performed by said personnel for the MIC which is temporary and can be terminated anytime at the pleasure of the appointing officer/authority. Designated personnel shall continue to receive their salaries, benefits, and emoluments from their respective offices or agencies: Provided, That they shall be paid honoraria for the additional and/or higher duties to be performed for the MIC.

“The secondment of the GFIs’ personnel to the MIC involves the movement of said personnel from their mother agencies and offices to the MIC, WHICH IS TEMPORARY IN NATURE, WHICH MAY OR MAY NOT REQUIRE THE ISSUANCE OF AN APPOINTMENT, AND WHICH MAY OR MAY NOT INVOLVE INCREASE IN COMPENSATION AND BENEFITS. Seconded personnel shall receive, in lieu of their respective compensation from their respective agencies or offices, the salaries, emoluments and all other benefits which their positions are entitled to receive from the MIC.”

Imagine, these personnel movements may NOT even require the issuance of an appointment!  What kind of corporation is this MIC?

On the fines and imprisonments for violations of the Law, we can see that these are way below and not commensurate to the amount of money that can be stolen from the MIF or the MIC.  Higher fines and longer imprisonments must be meted by the Law for its violators.

Why should the Philippines surrender the sovereignty which resides in its people and the jurisdiction of its courts and arbitration bodies to “internationally accepted institutional systems of arbitration” which, historically, has always put the Philippines and the Filipino people at the losing end? Why is the provision below included in the MIF Law which is clearly detrimental to the interests of the Filipino people? This is a clear violation of the Constitution which states in Article II or the Declaration of Principles and State Policies, under “Principles,” that, “Section 1. The Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them.” The provision of the Law below surrenders the sovereignty of the Filipino people to shady systems of arbitration and likewise surrenders the jurisdiction of our courts and our very own arbitration bodies to strange and foreign entities which are usually COMMERCIAL in nature and therefore almost always takes the side of COMMERCIAL PRIVATE CORPORATIONS AND ENTITIES. Just read the provision of the Law below:

“SEC. 43. Dispute Settlement. — The provision of existing laws to the contrary notwithstanding, any dispute, controversy or claim arising out of or relating to investments entered pursuant to this Act or the breach, termination or invalidity thereof shall be resolved by good faith negotiations between the parties.

In the event that such negotiations do not succeed, any dispute, controversy or claim arising out of or relating to investments entered pursuant to this Act or the breach, termination or invalidity thereof shall be settled in accordance with internationally accepted institutional systems of arbitration of which the Philippines is a signatory.”

As crafted, the Filipino people and the sovereignty of our country is at the losing end of this Law and at the hands of, what may possibly, and even probably, corrupt PRIVATE LOCAL and/or FOREIGN institutions, corporations, and individuals with no possible accountability to our country and our people because they are protected and OUTSIDE our courts’ and very own arbitration bodies’ jurisdiction as provided by the very Law itself!

And so, this MIF Law really needs to be questioned in the Supreme Court in many, if not in all, its aspects!



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