Maharlika fund allowed to invest in JVs, infrastructure projects

The Maharlika Investment Corp. (MIC), which will manage the country’s first sovereign wealth fund, can invest in joint ventures (JVs), infrastructure projects, and sustainable development programs, as well as extend loans.

Under the implementing rules and regulations of Republic Act No. 11954 or the Maharlika Investment Fund (MIF) law, the MIC can invest in joint ventures or co-investments, mergers and acquisitions; and mutual and exchange-traded funds invested in underlying assets.

The MIC can also invest in real estate and infrastructure projects. However, investments in infrastructure projects should be “directed towards the fulfillment of national priorities such as the national infrastructure program of the Department of Public Works and Highways and other infrastructure agencies, the inclusive innovation industry strategy of the Department of Trade and Industry, and the public investment programs of the National Economic and Development Authority.”

Investments in real estate should also be limited to “high-impact projects, those contained in the Strategic Investment Priority Plan, as well as other projects that are approved by the appropriate approving body to ensure that these are in line with the socioeconomic development program of the government.”

The MIC can also pour funds into health, education, research and innovation projects, as well as sustainable development programs.

It can extend “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.”

The board of directors must also make sure that allowable investments are in line with the “principle of sustainability.”

The MIC is also authorized to invest in cash, foreign currencies, metals, and other tradable commodities; fixed-income instruments issued by sovereigns, quasi-sovereigns and supranationals; domestic and foreign corporate bonds; listed or unlisted equities, whether common, preferred, or hybrids; and Islamic investments, such as Sukuk bonds.

Board directors
Meanwhile, the list of nominees for the MIC’s president and chief executive officer (CEO), regular directors, and independent directors must be presented to the President by October.

“The solicitation of nominees and applications, for purposes of initial appointment, may be made immediately upon the publication of the IRR, the closing date of which shall not exceed 15 days from the effectivity of the IRR,” it said. The IRR will take effect on Sept. 12.

Under the rules, the MIC president and CEO must have an advanced degree (MBA, MA, MSc, PhD) in finance, economics, business administration, or any related field from a reputable university.

The MIC president and CEO must also show “exceptional experience and expertise in corporate management, financial planning strategy, strategic planning and vision, market and business development, budget development,” and have work experience in a finance or investment-related field for at least 10 years.

A minimum of 10 years in a senior leadership role in a “reputable financial institution or public or private sector organization” is also required.

The president and CEO will direct and supervise the operations and internal administration of the MIC. They will also be charged with the risk management, financial performance, human resources, as well as the accounting and legal affairs of the MIC.

Meanwhile, regular directors must be Filipino citizens, at least 35 years old and must be of “good moral standing and reputation, of recognized probity and independence and have substantial experience and expertise in corporate governance and administration, investment in financial assets, and/or management of investments in the global and local markets.”

The independent directors must have “probity, competence, expertise and experience in finance, economics, investments, business management, or law, and are highly capable to contribute to the attainment of the objectives and purposes of the MIF.”

Both regular and independent directors are required to have a master’s degree in finance, economics, business administration. They must also have at least 10 years of experience in finance, investments, economics, business, or any related field. — Luisa Maria Jacinta C. Jocson