MALACAÑANG has suspended the implementation of the implementing rules and regulations (IRR) of Republic Act No. 11954 or the Maharlika Investment Fund, but did not give a reason for doing so.
In a memorandum issued on October 12, Executive Secretary Lucas P. Bersamin directed the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) to defer the rollout of the IRR pending further study of its provisions.
He also instructed LBP and DBP to notify all concerned heads of departments, bureaus, and other agencies of the Executive department including government-owned and -controlled corporations about the development.
As of press time, the Palace has yet to release the cause of why it initiated the review.
The Bureau of Treasury issued the IRR of RA 11954 last August 28 for implementation of the MIF, while both LBP and DBP are undergoing a merger, which is expected to be completed by the first half of 2024.
Earlier this month, several incumbent and former lawmakers filed a case before the Supreme Court seeking to declare unconstitutional the Maharlika legislation.
OSG: ready to defend law
THE Office of the Solicitor General (OSG) will continue to defend the constitutionality of the MIF law before the Supreme Court despite the President’s decision to suspend its implementation.
Solicitor General Menardo Guevarra said his office is preparing its response to the petition filed by Senator Aquilino “Koko” Pimentel III together with representatives of Bayan Muna Party-list group, seeking to declare unconstitutional Republic Act No. 11954 or Maharlika Investment Fund Act of 2023.
The Court, in a resolution on October 3, 2023, ordered respondents Executive Secretary Lucas P. Bersamin, Finance Secretary Benjamin E. Diokno, the House of Representatives and the Senate to comment within 10 days on the petition.
Unless the petitioners withdraw the petition due to the suspension of the MIF, Guevarra said it has no other recourse but to comply with the Court’s order.
“We have not officially received a copy of the SC’s resolution, but we have been preparing our comment since the Court’s resolution appeared in the SC website,” Guevarra noted.
“If the implementation is indeed suspended, it’s up to the petitioners if they wish to withdraw the petition. But, if they don’t, and the SC does not suspend the proceedings either, the OSG will be prepared to submit its comment on the validity of the MIF law,” he added.
Republic Act No. 11954 creates the Maharlika Investment Fund, the country’s first sovereign wealth fund. It will be managed by the Maharlika Investment Corporation (MIC), with a seed capital of P150 billion.
In seeking to declare RA 11954 unconstitutional, the petitioners raised these arguments: It is void because it was passed in violation of Section 26 (2) Article VI of the 1987 Constitution; the test of economic viability as mandated under Section 16 of Article XII of the Constitution was not complied with prior to the creation of the Maharlika Investment Corporation; and the law violates the independence of the Bangko Sentral ng Pilipinas as provided under Section 20, Article XII of the 1987 Constitution.
The petitioners said the MIF law is a dangerous law as it entrusts hundreds of billions in public funds to unknown fund managers.
They noted the MIF law is being implemented in the midst of a budget deficit of P 1.6 trillion, inflation rate of 6.1 percent, and poverty incidence of 18.1 percent in 2022 and massive unemployment and underemployment.