Definitions
- Advisory Board: Body providing guidance to the Maharlika Investment Corporation (MIC) Board of Directors.
- Board of Directors: Governing body of MIC.
- Divestment: Transfer or disposal of property title excluding relatives within the fourth degree.
- Founding GFIs: Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP).
- Independent Director: Director free from conflicts, independent of management and controlling shareholders.
- MIC: Government-owned corporation managing the MIF.
- MIF: The fund created to promote economic growth.
- Regular Director: President-appointed full-time director without other public office.
- Santiago Principles: International best practice standards for Sovereign Wealth Funds (SWFs).
Establishment and Corporate Powers of MIC
- MIC established as a GOCC to manage and invest the MIF for optimal returns and economic growth.
- Principal place of business in Metro Manila; may establish branches.
- Authorized capital stock of P500 billion with common and preferred shares.
- Capitalization funded by National Government, LBP, DBP, BSP dividends, PAGCOR income, DOF Privatization proceeds, and others.
- MIC authorized to enter contracts, own/sell property, sue/be sued, issue bonds (not government guaranteed), and perform necessary functions.
Functions and Management of MIC
- Diversify investments locally and globally.
- Manage initial and future funds according to law and international standards.
- Foster capacity building in finance, risk mitigation, governance.
- Adhere to transparency and Santiago Principles.
- Administrative expenses capped at 2% of funds managed, with target reductions.
Maharlika Investment Fund (MIF)
- Created to support socioeconomic development through strategic and profitable investments.
- Fund sourced from MIC capitalization, selected GFIs, National Government contributions, excluding certain social security and insurance agencies.
- Investments limited to 25% of GFIs' net worth.
- Use for strategic government infrastructure and development projects.
Allowable and Prohibited Investments
- Allowed: Cash, securities, equities, bonds, joint ventures, real estate, infrastructure aligned with national priorities, health, education, research projects, loans and guarantees.
- Joint ventures and co-investments must be transparent and mutually beneficial.
- Prohibited investments are those banned under existing laws and international conventions.
Investment Policies and Limitations
- Board to formulate policies balancing risk and return, including Environmental, Social, and Governance (ESG) principles.
- Risk management standards to avoid concentration and undue exposure.
- Regular disclosure and transparency of investment activities.
- No financial liability guaranteed by the government for MIC actions without proper authorization.
Governance Structure
- Board of Directors: 9 members including Finance Secretary (Chair), MIC CEO, LBP and DBP Presidents, 2 Regular Directors, and 3 Independent Directors.
- Regular Directors serve 3 years, full-time, exclude conflicts of interest; Independent Directors serve 1-year terms with max 9-year tenure.
- Disqualifications include criminal convictions, fraudulent acts, pending fraud-related cases.
- Board members bonded with a P10 million fidelity bond.
- Board powers include policy approval, asset management, appointment of key officials, dividend declarations, audit oversight.
Officers and Committees
- President and CEO (PCEO): Oversees MIC operations with significant corporate and financial experience, appointed for 3 years.
- Chief Investment and Operations Officer (CIOO): Manages investment operations, appointed by Board.
- Risk Management Committee: 5 members including independent director chair, monitors risk-reward balance.
Reporting and Transparency
- MIC subject to Government-Owned and Controlled Corporations (GOCC) Governance Act, Government Procurement Reform Act, and other relevant laws.
- Internal and external audits by appointed firms and Commission on Audit.
- Special audit every 5 years.
- Quarterly and annual reports submitted to a Joint Congressional Oversight Committee (MIF-JCOC).
- Public access rights to MIC documents, disclosures, and reports.
Offenses and Penalties
- Penalties for directors/officers holding disqualifications include fines (P5M-P15M) and perpetual disqualification.
- Auditors certifying inaccurate financials face fines, imprisonment, and disqualification.
- Liability for graft, corruption, and fraudulent acts includes fines, imprisonment, and disqualification.
- Protection for whistleblowers with penalties for retaliation.
- Offense prescription period of 10 years, except for property recovery rights.
Miscellaneous Provisions
- Appropriations for capitalization from BSP dividends, PAGCOR revenues, privatization proceeds, and other sources.
- Legal affairs handled by Office of Government Corporate Counsel.
- MIC corporate term of 35 years.
- Implementing rules to be promulgated within 90 days.
- Supplentary application of Revised Corporation Code.
- Separability clause and repeal of inconsistent laws.
- Immediate effectivity upon publication; also promulgated in Filipino.