Maharlika Investment Fund Act of 2023 (Republic Act No. 11954)

SECTION 1. Title. - This Act shall be known as the "Maharlika Investment Fund Act of 2023". SEC. 2. Declaration of Policy. - It is the policy of the State to generate, preserve and grow national wealth, create jobs, promote trade and investments, foster technological transformation, strengthen connectivity, expand infrastructure, and achieve energy, water, and food security. The State recognizes the vital role of various investments in financial assets in promoting economic growth, accelerating job creation, and improving the welfare of Filipinos. The State 2 3 acknowledges the need to preserve and optimize the use of (e) Independent Director refers to a person who is government financial assets to generate retui-ns, and support independent of management and the controlling shareholder, the infrastructure development agenda of the government, and is free from any business or other relationship which thereby promoting efficient intergenerational management of could, or could reasonably be perceived to, materially interfere wealth. with his exercise of independent judgment in carrying out his responsibilities as a director; The State further recognizes the country's naturnl capital and its role as the basis for the economy, hence the need to (f) Maharlika Investment Corporation (MIC) refers to ensure its integrity and measure its contribution in national the State investment body, a government-owned and -controlled income accounting to improve decision making, and corporation (GOCC) created under this Act, which shall be investments in conservation and prntection of natmal res01uces responsible for the overall governance and management of the and biodiversity. MIF; Towards this end, the State shall establish a Maharlika (g) Maharlika Investment Fund (MIF or Fund) refers Investment Fund by investing national funds, and coordinating to the fund created under this Act; and strengthening the investment activities of the country's top-performing government financial institutions to promote (h) Regular Director refers to a director appointed by the economic growth and social development. President of the Philippines who shall serve in the Board full-time, and shall not hold any other public office during his ARTICLE I tenure, unless otherwise provided under this Act; and DEFINITION OF TERMS (i) Santiago Principles refers to the twenty-four (24) Generally Accepted Principles and Practices (GAPP) voluntarily SEC. 3. Definition of Terms. - The following terms as endorsed by the International Forum of Sovereign Wealth used in this Act and the implementing rules and regulations Funds (IFSWF) members. The GAPP for Sovereign Wealth shall be understood as follows: Funds (SWFs) are designed as guidelines that assign best practices for the operations of SWFs. They are the rules (a) Advisory Body refers to the body established under followed by SWF that promote stability in the global financial this Act which shall provide guidance, counsel and advice to system, set proper controls on investment risks, and the Board of Directors of the Maharlika Investment implement sound governance structure. Coi-poration, and all other functions as provided for in this Act; ARTICLE II (b) Board of Directors (Board) refers to the governing body of the Maharlika Investment Corporation; :MAHARLIKA INVESTMENT CORPORATION (c) Divestment refers to the transfer of title or disposal SEC. 4. Establishment of the Maharlika Investment of interest in property by voluntarily, completely, and actually Corporation. - There is hereby created a corporate body to depriving or dispossessing oneself of his right or title to it in be named as the "Maharlika Investment Corporation". The favor of a person or persons other than his spouse or any MIC shall act as the sole vehicle for the pui-pose of mobilizing relative within the fourth civil degree of consanguinity and utilizing the MIF for investments in transactions in order or affinity; to generate optimal returns on investments (ROis), while contributing to the overall goal of reinvigorating job creation (d) Founding Government Financial Institutions and accelerating poverty reduction by sustaining the economy's (Founding GFis) refer to the Land Bank of the Philippines high growth trajectory, while ensuring sustainable development. (LBP) and Development Bank of the Philippines (DBP); 4 5 The MIC shall govern and manage the Fund in (P75,000,000,000.00) pertaining to the contributions of the accordance with the objectives and purposes set forth in this Founding GFis shall be fully paid by them; and Act, and other laws, rules and regulations, and it shall adhere to the Santiago Principles and other internationally-accepted (2) Preferred shares of one billion two hundred fifty standards of transparency and accountability: Provided, That million (1,250,000,000) equivalent to One hundred twenty-five the MIC shall coordinate with all relevant institutions to billion pesos (Pl25,000,000,000.00) to be made available for ensure harmonization of policies. subscription by the National Government, its agencies or instrumentalities, GOCCs or GFis, except Social Security SEC. 5. Place of Business. - The MIC shall have its System (SSS), Government Service Insurance System (GSIS), principal place of business in Metro Manila, but may maintain Philippine Health Insurance Corporation (PhilHealth), Home branches, and agencies in such other places, within and Development Mutual Fund (Pag-lBIG Fund), Overseas Workers outside the Philippines, as the proper conduct of its business Welfare Administration (OWWA), and Philippine Veterans may requrre. Affairs Office (PVAO) Pension Fund: Provided, That preferred shares shall be non-voting, non-participating, non-convertible, SEC. 6. Capitalization and Initial Funding. - The MIC and may be issued from time to time by the Board of shall have an authorized capital stock of Five hundred billion Directors in one or more series, specifying the relative rights, pesos (P500,000,000,000.00) to be divided into five (5) billion preferences and further limitations thereof. For this purpose, shares, with a par value of One hundred pesos (Pl00.00) per a single private sector shareholder's interest includes the direct share which shall have the following classifications and or indirect shareholdings in MIC held by the shareholder, as features: well as those held by the corporation, its subsidiaries, affiliates, and related parties that are owned or controlled directly or (1) Common shares of three billion seven hundred fifty indirectly by the shareholder. million (3,750,000,000) equivalent to Three hundred seventy five billion pesos (P375,000,000,000.00), to be subscribed by the The contribution of the National Government shall come National Government, its agencies or instrumentalities, from the following sources: including government-owned and -controlled corporations (GOCCs) or government-financial institutions (GFis): Provided, (a) Bangko Sentral ng Pilipinas (BSP) Dividends. For That one billion two hundred fifty million (1,250,000,000) the first and second fiscal years upon the effectivity of this shares equivalent to One hundred twenty-five billion pesos Act, One hundred percent (100%) of the BSP's total declared (Pl25,000,000,000.00) shall initially be subscribed by the dividends, as computed under Republic Act No. 7653 also following: known as the "New Central Bank Act", as amended by Republic Act No. 11211, shall be remitted to the National (a) Land Bank of the Philippines - Fifty billion pesos Government for the capitalization of the MIC, in the amount (P50,000,000,000.00); not exceeding the Fifty billion pesos (P50,000,000,000.00) initial subscription of the National Government to the capitalization (b) Development Bank of the Philippines - Twenty-five of the MIC under this section: Provided, That the Monetary billion pesos (P25,000,000,000.00); and Board may recommend to the President of the Philippines the reduction of BSP's dividend contribution to the MIC whenever (c) National Government - Fifty billion pesos economic conditions may warrant. Thereafter, the dividends of (P50,000,000,000.00): the BSP shall be remitted to the National Government to fund the increase in the capitalization of the BSP in accordance Provided, further, That of the One hundred twenty-five with Section 2 of Republic Act No. 7653, as amended by billion pesos (Pl25,000,000,000.00), Seventy-five billion pesos Republic Act No. 11211. 6 7 (b) Government Share in Philippine Gaming Corporation (d) Other sources, such as royalties and/or special (PAGCOR). Ten percent (10%) of the National Government's assessments based on the fiscal regime to be implemented by share from the income of the PAGCOR, as provided for in the National Government. Presidential Decree No. 1869, as amended: Provided, That the share earmarked for the Universal Health Care Act under The Founding GFis and the National Government may,

Sec. 37(b) of Republic Act No. 11223 shall not in any manner upon recommendation of the Advisory Body, and without be diminished: Provided, further, That the above funding from prejudice to additional subscription and payment, use its stock PAGCOR will be for a period of five (5) years. Other dividends from its unappropriated retained earnings in the government-owned gaming operators and/or regulators shall MIC, to subscribe and pay for the balance of the authorized also contribute ten percent (10%) of their revenues from capital stock. gaming operations. Within thirty (30) days from the effectivity of the Implementing Rules and Regulations, the Governance The government agencies and GOCCs providing for the Commission for GOCCs (GCG) shall submit the list of social security and public health insurance of government government-owned gaming operators and/or regulators that employees, private sector workers and employees, and other should remit to the MIC. The list shall be updated annually, sectors and subsectors such as, but not limited to, the SSS, or as often as necessary. The remittance of revenues of gaming GSIS, PhilHealth, Pag-IBIG Fund, OWWA, and PVAO operators and/or regulators shall be for five (5) years. Pension Fund shall be absolutely prohibited, whether mandatory or voluntary, to contribute to the capitalization of PAGCOR and other government-owned gaming operators the MIC. and/or regulators shall remit the National Government's share to the Bureau of the Treasury (BTr). Thereafter, the BTr shall SEC. 7. Increase in Capitalization. - The Board, upon the immediately release and transfer the portion intended for the recommendation of the Advisory Body, shall request Congress MlF to the MIC, subject to the usual budgeting, accounting, for legislation to increase the capitalization of the MIC up to and auditing rules and regulations. such an amount, as may be necessary to attain the objectives of this Act. (c) Department of Finance - Privatization and Management Office (DOF-PMO). The increase in the authorized capital stock may be subscribed and paid for by the Founding GFis and/or the (i) Properties, real and personal, identified by the National Government from the unappropriated retained Privatization Council. The real and personal properties to be earnings of the MIC: Provided, That payment for subscription identified by the Privatization Council to be contributed to the by the National Government of the increase in authorized MIC shall be directly related to its mandate. The properties capital stock, other than those subscribed and paid from its to be contributed to the MlC shall be appraised at their fair share in the unappropriated retained earnings, shall be market value at the time of their transfer. The title, as well appropriated by Congress. as all rights and obligations pertaining thereto, shall be transferred to the MIC: Provided, That the MIC shall in no SEC. 8. Corporate Powers. - The MIC is hereby case be held liable for outstanding tax liabilities of the authorized to adopt, alter, and use a corporate seal which shall properties; and be judicially noticed; to enter into contracts; to lease or own real and personal property, and to sell or otherwise dispose (ii) Proceeds from the privatization of government assets, of the same; to sue and be sued; and otherwise to do and the amount of which shall be determined by the Privatization perform any and all things that may be necessary or proper Council consistent with the fiscal program of the government. to carry out the purposes of this Act. 8 9 The MIC may acquire and hold such assets and incur The MIC shall provide for appropriate reserves for the such liabilities in connection with its operations authorized by redemption or retirement of the Bonds. These Bonds and other the provisions of this Act, or as are essential to the proper obligations shall be redeemable at the option of the MIC at conduct of such operations. or before maturity and in such manner as may be stipulated therein and shall bear such rate of interest as may be fixed The MIC may compromise or release, in whole or in part, by the MIC. any claim of or settled liability to the MIC, under such terms and conditions as may be prescribed by the Board, upon Such obligations shall be secured by the assets under the favorable recommendation of the Advisory Body, to protect the management of the MIC, including the stocks, bonds, interests of the MIC and the integrity of the MIF: Provided, debentures, and other securities purchased or held by it under That in no event shall the MIC compromise or release any the provisions of this Act. These bonds and debentures may claim or liability in excess of the amount as prescribed under be long-term, medium, or short-term, with fixed interest rate relevant laws, rules and regulations. or floating interest rate. SEC. 9. Functions of the Maharlika Investment In no instance shall the Philippine government guarantee Corporation. - In carrying out its objectives and functions, any Bonds issued by the MIC. the MIC shall: SEC. 11. Administrative and Operational Expenses of the (a) Establish a diversified portfolio of investments in the Maharlika Investment Corporation. - The Board of the MIC local and global financial markets and in other assets that is authorized to disburse from the Fund such amounts as may promote the objectives of the Fund; be necessary for administrative and operating expenses, the total of which shall not exceed two percent (2%) of funds (b) Manage and invest the initial and future managed: Provided, That the Board of Directors shall set contributions to the Fund in accordance with this Act; annual targets to reduce operating and administrative expenses as a share of funds managed: Provided, further, That the (c) Accept and manage investment mandates whose foregoing ceiling shall decrease as the size of the Fund investment purpose is to increase income for development goals; increases based on industry practice. (d) Develop and foster skills in finance, economics, risk ARTICLE III mitigation, good governance, and other related axeas, consistent with the capacity and capabilities build-up of human resources MAHARLIKA INVESTMENT FUND m the industry; and SEC. 12. Establishment of the Maharlika Investment (e) Implement international best practices in investing Fund. - There is hereby created a Maharlika Investment Fund and managing assets in accordance with the Santiago (MIF), a Fund that adheres to the principles of good Principles and other internationally-accepted standards and governance, transparency, and accountability. The Fund shall principles of transparency and accountability. initially be sourced from the capitalization of the MIC, as provided for in this Act; the investible funds of select GFis SEC. 10. Issuance of Bonds. - The MIC may issue all and from contributions of the National Government, as well kinds of bonds, debentures, and securities, and/or the renewal as other sources of funds, as provided in this Act: Provided, or refunding thereof (hereinafter called "Bonds"), within That other GFis and GOCCs may invest into the MIF, subject and/or outside the Philippines, at such terms, rates, and to their respective investment and risk management strategies, conditions as the Board of Directors may determine, subject and approval of their respective boards: Provided, further, to compliance with the provisions of applicable law, and rules That government agencies and GOCCs providing for the social and regulations promulgated by the Monetary Board. /0 11 security and public health insurance of government employees, (b) Fixed income instruments issued by sovereigns, private sector workers and employees, and other sectors and quasi-sovereigns and supranationals; subsectors such as, but not limited to, the SSS, GSIS, PhilHealth, Pag-lBIG Fund, OWWA, and PVAO Pension (c) Domestic and foreign corporate bonds; Fund, shall be absolutely prohibited, whether mandatory or voluntary, to invest in the MIF: Provided, furthermore, That (d) Listed or unlisted equities, whether common, the investments from LBP, DBP, and other GFls shall not preferred, or hybrids; exceed twenty-five percent (25%) of their net worth. (e) Islamic investments, such as Sukuk bonds; Additional investments may likewise be sourced from investments of reputable private and State-owned financial (t) Joint ventures or co-investments, mergers and institutions and corporations in the form and under the terms acquisitions; and conditions that the Board of Directors may prescribe. (g) Mutual and exchange-traded funds invested m The Fund shall be used to invest on a strategic and underlying assets; commercial basis in a manner designed to promote fiscal stability for economic development, and strengthen the (h) Real estate and infrastructure projects: Provided, top-performing GFis through additional investment platforms That investments in infrastructure projects shall be directed that will help attain the National Government's priority plans. towards the fulfillment of national priorities such as the national infrastructure program of the Department of Public SEC. 13. Objective of the Maharlika Investment Works and Highways (DPWH) and other infrastructure Fund. - The objective of the MIF is to promote socioeconomic agencies, the inclusive innovation industry strategy of the development. This will be achieved by making strategic and Department of Trade and Industry (DTI), and the public profitable investments in key sectors to preserve and enhance investment programs of the National Economic and long-term value of the Fund; to obtain the optimal absolute Development Authority (NEDA); return and achievable financial gains on its investments; and to satisfy the requirements of liquidity, safety/security, and (i) Programs and projects on health, education, research yield in order to ensure profitability. In pooling the investible and innovation, and other such investments that contribute funds from the GFls, and channeling them to diversified to sustainable development; financial assets and development projects, the MIC's activities shall contribute to a prudent and-transparent management of (j) Loans and guarantees to, or participation into joint the government resources. ventures or consortiums with Filipino and foreign investors, whether in the majority or minority position in commercial, ARTICLE IV industrial, mining, agricultural, housing, energy, and other enterprises, which may be necessary or contributory to the INVEST.MENTS economic development of the country, or important to the public interest; and SEC. 14. Allowable Investments. - Subject to strict compliance with the Investment and Risk Management (k) Other investments with sustainable and Guidelines, the Board of Directors of the MIC may engage in developmental impact aligned with Section 17 of this Act, as the following investments: may be approved by the Board. (a) Cash, foreign cu1Tencies, metals, and other tradeable Investments in real estate, including agro-industrial commodities; estates and economic zones, estate infrastructure and other 12 13 development projects, whether alone or in partnership with (c) Risk management for the investments, including other corporate entities, shall be limited to high-impact projects prudential standards and concentration limits, to avoid undue as approved by the appropriate approving body, to ensure that risk concentration from excessive exposures; these are in line with the socioeconomic development program of the government. (d) Standards for assessing the investment performance; The Board of Dii:ectors of the MIC shall likewise enstu-e (e) Matters relating to international best practices for that all allowable investments as provided in this section are institutional investments; in accordance with the principle of sustainability. (f) Matters specific to rules and regulations where SEC. 15. Forms of Joint Ventures and Co-Investments. investments are domiciled; - In line with Section 14(:f) of this Act, the Board shall prescribe the form, as well as the terms and conditions, of (g) Procedural framework and cooperation among the joint venture and/or co-investment, subject to pertinent investors, including fund commitments, co-investments, voting laws, rules and regulations: Provided, That the Board and requirements, exit mechanisms, and other matters pertaining management of the MIC shall ensure that all transactions to the pooling of funds and the management thereof; with private and other State-owned entities in a joint venture or co-investment are not prejudicial to the interest of the (h) Matters relating to the procedure for assessing, government and complies with the principles under the last deploying, and liquidating investments; paragraph of Section 12 of this Act. (i) Disclosure and transparency mechanisms to oversee To ensure transparency and accountability, the MIC shall compliance by various departments of the MIC with the regularly publish the terms and conditions of the standards, procedures and policies set by the Board; arrangement, in the form and manner as determined by the Board, as well as all financial statements and reports relative G) Aside from the potential earnings, the Board shall to the operations of the joint venture and/or co-investment on take into account risks other than economic, such as climate its website, which shall be immediately updated and made risks and those that are reported under rules and regulations easily accessible to the public. of government agencies requiring ESG reporting as well as resource valuation studies and natural capital accounting in SEC. 16. Prohibited Investments. - In no case shall the making investment decisions; and MIC, in whatever manner or devise, invest in areas that are explicitly prohibited under existing laws and conventions to (k) All other matters needed to be discussed to guarantee which the Philippines is a party. compliance with the objectives of the MIF. SEC. 17. Investment Policy. - The Board of Directors In the formulation of its investment policies, the Board shall formulate written policies in relation to the following of Directors shall be guided by the principle that priority must matters: be given to investing in government infrastructure and other developmental projects which would yield the highest return (a) Directions on the acceptable balance between risk and on investment coupled with the developmental impact of lower return of the overall portfolio; cost of living and lower cost of basic commodities, as well as in those investments that incorporate ESG considerations and (b) Investment policies, including policies that promote sustainable practices. The Board of Directors shall ensure that environmental, social, and governance (ESG) principles, mandates, strategies, and guidelines on financing infrastructure projects and other investments; 14 15 policies formulated are consistent with the objectives of the (b) President and Chief Executive Officer (PCEO) of the Fund, and the same shall be subject to periodic review. MIC as Vice-Chairperson; All investment policies approved by the Board of the MIC (c) President and CEO of the LBP; shall be posted on its website which shall be immediately updated and be made easily accessible to the public. (d) President and CEO of the DBP; SEC. 18. Limitations and Safeguards on the Maharlika (e) Two (2) Regular Directors; and Investment Fund. - The management of the MIF shall be subject to a set of investment policies, guidelines, and risk (t) Three (3) Independent Directors from the private management limits and procedures, as approved by the Board sector. of Directors, upon due consideration of the recommendations of the Advisory Body. Investment and risk management Provided, That, in case of a merger, consolidation, strategies of the MIC shall be in line with the policies and abolition, or dissolution of any of the Founding GFis, the seat objectives hereunder stated to ensure the long-term viability in the Board of the absorbed, dissolved, or abolished GFI shall of the Fund. be filled by the next highest ranking officer of the GFI who has assumed the rights of the absorbed, dissolved, or Investment and risk management plans, strategies and abolished GFI. activities of the MIC, involving the MIF, shall be disclosed and published on its website that will be immediately updated and The Regular Directors shall be citizens of the Philippines, made easily accessible to the public. at least thirty-five (35) years of age, and must be of good moral standing and reputation, of recognized probity and No guarantee involving financial liability arising from independence, and have substantial experience and expertise any action of the MIC shall be binding upon the Philippine in any of the following: (a) corporate governance and government without obtaining the written authority of the administration, (b) investment in financial assets, and proper authorities under existing laws. (c) management of investments in the global and local markets. The Regular Directors shall be appointed by the SEC. 19. Fees and Charges on the Establishment of the President of the Philippines upon recommendation of the Maharlika Investment Fund. - Third-party fees and all Advisory Body for a term of three (3) years. In case of removal charges incurred in connection with the establishment and or resignation, the appointment to any vacancy shall only be effective management of the MIF, such as custody fees, for the unexpired term of the predecessor. The appointment transaction fees, clearing fees, and management fees payable of a Regular Director to fill such vacancy shall be in to external fund managers, shall be charged against the MIF, accordance with the manner provided for regular nomination, in accordance with the applicable policies on fund shortlisting and appointment of Regular Directors. disbursements. The Regular Directors shall serve in the Board full-time, ARTICLE V and shall not hold any other public office during their tenure. Neither will the Regular Directors have or possess any private GOVERNANCE financial and business interest while in office. In this regard, Regular Directors shall be required to resign from, and divest SEC. 20. Board of Directors. - There shall be nine (9) themselves of any and all interests in any private institution members of the Board of Directors composed as follows: that would put them in conflict with the interests of the MIC before assumption to their office. (a) The Secretary of Finance shall sit as the Chairperson rn an ex officio capacity; 16 17 The Independent Directors shall be appointed by the The foregoing grounds are without prejudice to President of the Philippines, upon the recommendation of the qualifications or other disqualifications, which the Board of Advisory Body, for a term of one (1) year. The Independent Directors may impose in its promotion of good corporate Directors shall be eligible for reappointment: Provided, That governance. the cumulative term of an Independent Director shall not exceed nine (9) years. The Advisory Body shall ensure that All members of the Board of Directors shall be bonded the selected members of the Board of Directors are with proven to the government for the faithful performance of all duties probity, competence, expertise and experience in finance, imposed upon him by law and for the faithful accounting of economics, investments, business management, or law, and are all funds and public properties coming into his custody or highly capable to contribute to the attainment of the objectives control in accordance with the Public Bonding Law under the and purposes of the MIF. Revised Administrative Code, Executive Order No. 449 s. 1997, and related laws and issuances. Prior to the discharge of The Independent Directors shall not hold any business duties, each member shall be required to secure a :fidelity bond or financial interests and other relationships which could, or of Ten million pesos (Pl0,000,000.00). could reasonably be pei-ceived to, materially interfere with their exercise of independent judgment in carrying out their The specific guidelines in this section, including the rules responsibilities as directors. on appointment, election and termination of membership in the Board, shall be provided in the implementing rules and At least one (1) year from the end of their tenure, the regulations of this Act, to ensure that only those eligible and Regular and Independent Directors shall be barred from qualified shall be appointed to the Board. employment, whether in full-time or advisory capacity, in any private company and institution, the interests of which directly SEC. 21. Powers and Functions of the Board of compete with or are in conflict with the MIC. Directors. - The primary function of the Board of Directors is to govern and manage the MIC, its assets, and investments A person shall be disqualified from being a director, if in accordance with this Act. The specific functions of the Board within five (5) years prior to his appointment as such, the shall include the following: person was: (a) To direct the management and operations, and (a) Convicted by final judgment of an offense punishable administration of the MIC; by imprisonment for a period exceeding six (6) years; (b) To approve and implement the Investment and Risk (b) Found administratively liable for any offense Management Guidelines and such other investment policies, involving fraudulent acts; guidelines, and parameters to effectively carry out the purposes of this Act; (c) Convicted by final judgment or found liable by a foreign court or equivalent foreign regulatory authority for (c) To set mrn1mum criteria and targets for acts, violations, or misconduct similar to those enumerated in investments; paragraphs (a) and (b) above; or (d) To oversee the investment processes which may (d) Has a pending administrative, civil or criminal case include asset allocation, portfolio construction, monitoring, and relating to fraud, plunder, corrupt practices, money laundering, risk management; tax evasion, or any similar crimes involving misuse of fund in the person's possession or breach of trust. (e) To approve the issuance of debt and debt-like instruments; 18 19 (f) To develop short, medium, and long-term strategies Fund caused by negligence, willful misconduct, fraud, or appropriate for investments; actions in breach of any Investment Agreement; and/or (g) To regularly meet and consult with the Advisory (3) Failure to meet performance standards set by the Body; Board of Directors; (h) To engage as may be necessary an International (n) To appoint key and critical officials and employees Advisory Consultant whose main responsibility is to advise the as may be necessary to assist the Board of Directors in Board on its development strategy and investment business, carrying out its functions; equip executives and management with insights on geopolitical and macro-economic issues, international financial market (o) To submit semestral reports on investment conditions, and global investment trends; performance to the Advisory Body and to the President of the Philippines; (i) To engage external fund managers and investment advisors, as may be necessary, to manage the MIF; (p) To review and certify the MIC/MlF financial statements; (j) To declare dividends in accordance with law and subject to the provisions of Republic Act No. 7656; (q) To act as Trustee of the MIF and such other assets as may be assigned to it and direct how its assets are (k) To determine in accordance with Republic Act No. managed; 10149, or the "GOCC Governance Act of 2011", the organizational structure, staffing pattern, number of personnel (r) To constitute an Audit Committee from among its of the MIC, and define their duties and responsibilities as well members. The Audit Committee shall recommend to the Board as their compensation and other emoluments: Provided, That the engagement of an external auditor and oversee the internal the Board shall determine the positions that are highly and external audits mandated under this Act; technical, including 'their compensation and other emoluments, and bonuses: Provided, further, That in all cases, such (s) To perform other functions, duties and compensation and emoluments shall be comparable with the responsibilities necessary, related and incidental to the prevailing rates in the private sector. The organizational performance of the above-mentioned powers and functions; and structure, staffing pattern and compensation structure of the MIC shall be subject to the approval of the President of the (t) To create, set up, and launch one or more sub-funds Philippines; within the Fund, each of which shall have its specific investment objectives and strategies to be determined by the (1) To exclusively prescribe a system for performance Board of Directors in line with the investment objectives and standards and evaluation for officials and employees of MIC; ) policies of the Fund. (m) To set the criteria and procedures for termination SEC. 22. Removal of Members of the Board of j of employment of officials and employees for: Directors. - The President of the Philippines may remove the PCEO, as well as the Regular and Independent Directors, for (1) Gross violation of the provisions in this Act or any of the following reasons: (a) if he subsequently possesses investment policies and guidelines set by the Board of the disqualifications under Section 20 of this Act; or (b) if he Directors; is physically or mentally incapacitated that he cannot properly discharge his duties and responsibilities and such incapacity (2) Commission of acts inimical to the MIF or the has lasted for more than six (6) months; or (c) if the member Republic of the Philippines, such as any loss suffered by the 20 21 is guilty of acts or operations which are of fraudulent or illegal The PCEO shall be appointed by the President of the character or which are manifestly opposed to the aims and Philippines, as recommended by the Advisory Body, for a term interests of the MIC. of three (3) years. SEC. 23. Duties and Qualifications of the President and SEC. 24. Duties and Qualifications of the Chief Chief Executiue Officer. - The PCEO shall direct and supervise Inuestment and Operating Officer (CIOO). - The CIOO is the operations and internal administration of the MIC, and responsible for regular administration duties of all investment shall be charged with the risk management, financial files, communicating investment strategy and policies, performance, human resources, accounting and legal affairs of managing and developing a team of financial analysts and the MIC. He shall have the following powers and duties: investment professionals, supervising risk management across portfolios and that sound investment policies are followed. (a) Prepare the agenda for the meetings of the Board of Directors and to submit for the consideration of the Board The CIOO shall be appointed by the Board of Directors of Directors the policies and measures which are necessary to and terminated for a term as provided for in the implementing carry out the purposes and provisions of this Act; rules and regulations. (b) Execute and administer the policies and measures The CIOO must have a degree in finance or a relevant approved by the Board of Directors; experience in the field and has proven expertise in managing a team of financial analysts and investment professionals. (c) Develop the MlC's business prospects by studying economic trends and revenue opportunities; projects acquisition SEC. 25. Quorum and Meetings of the Board. - The and expansion prospects; and oversee financial performance and Board of Directors shall meet at least once every two (2) weeks, risk profiles while ensuring that all of regulatory obligations or as often as may be necessary upon its constitution. It may are met; and hold special meetings to consider urgent matters upon call of the Chairperson or upon initiative of at least two (2) members (d) Exercise· such other powers as may be vested by the of the Board of Directors. Board of Directors. In order to constitute a quorum in Board meetings, a The PCEO, in the discharge of its functions, may delegate majority of the total membership of the Board shall be present. administrative responsibilities to other officers of the MIC. The approval by a majority of all members of the Board of Directcrs shall be required to constitute a decision of the Board The PCEO shall work closely with the executive of Directors. management and the Board and must have (a) exceptional experience and expertise in corporate management, financial The Board of Directors shall maintain and preserve a planning strategy, strategic planning and vision, market and complete record of the proceedings and deliberations of the business development, budget development; (b) has at least ten Board of Directors, including the minutes, transcripts, and (10) years management experience, including extensive records, either in original or digital form. The meetings of the commercial lending/credit administration experience; Board of Directors may be conducted through modern (c) in-depth understanding of the industry, including risk technologies such as teleconferencing and videoconferencing. management, compliance, and regulatory requirements; and (d) strategic knowledge of cash flow and capital planning SEC. 26. Risk Management Committee. - The Board shall management. organize a Risk Management Committee composed of five (5) members as follows: I !i 11 22 23 ARTICLE VI (a) One (1) Independent Director as Chairperson; APPLlCABILlTY (b) One (1) ex officio member of the Board; SEC. 29. Applicability of the GOCC Governance Act of (c) One (1) Regular Director; and 2011. - The MIC shall be subject to the provisions of Republic Act No. 10149 or the "GOCC Governance Act of 2011". (d) Two (2) senior executives of the MIC, one of whom is the key risk management officer. SEC. 30. Applicability of the Government Procurement Reforrn Act. - All procurement activities of the MIC shall be The Risk Management Committee shall ensure that the subject to, and governed by, the provisions of Republic Act MIC is talcing the appropriate measures to achieve a prudent No. 9184, otherwise known as the "Government Procurement balance between risk and reward in both ongoing and new Reform Act" and its implementing rules and regulations, business activities, taking careful consideration of risk except the engagement of professional, or technical services identification, measurement and assessment, mitigation, necessary for the selection of investments under Section 8 reporting and monitoring. hereof, such as fund management, investment analysis, advisory and underwriting, securities brokerage and dealership, SEC. 27. Advisory Body. - An Advisory Body is hereby and capital market and equity research analysis: Provided, created which shall be composed of the Secretary of the That the selection process to be adopted by the MIC for the Department of Budget and Management, the Secretary of engagement of the foregoing professional and technical services NEDA, and the Treasurer of the Philippines. shall be open and competitive, and approved by the Board. SEC. 28. Powers and Functions of the Advisory SEC. 31. Designation and Secondment. - For the first Body. - The Advisory Body shall exercise the following powers five (5) years of its operations, the MIC Board, upon the and functions: recommendation of the PCEO, shall authorize GFI non-executive personnel to the MIC, as may be necessary, (a) Advise and assist the Board of Directors in the subject to existing guidelines on secondment of the Civil formulation of the general policies related to mvestment and Service Commission. risk management, and other matters as may be necessary to carry out the provisions and purposes of this Act; The designation of the respective GFis' personnel to the MIC involves the imposition of additional and/or higher duties (b) Advise and provide guidance on issues pertaining or to be performed by said personnel for the MIC which is related to the plans and projects of the MIC; temporary and can be terminated anytime at the pleasure of the appointing officer/authority. Designated personnel shall (c) Recommend Regular and lndepende?t Director continue to receive their salaries, benefits, and emoluments candidates who shall be appointed by the President of the from their respective offices or agencies: Provided, That they Philippines pursuant to Section 20 of this Act; and shall be paid honoraria for the additional and/or higher duties to be performed for the MIC. (d) Perform other functions, duties and responsibilities necessary to effectively carry out its mandate. The secondment of the GFis' personnel to the MIC involves the movement of said personnel from their mother Except as otherwise provided under this Act, the Advisory agencies and offices to the MIC, which is temporary in nature, Body shall not take part in the management of the MIC. which may or may not require the issuance of an appointment, and which may or may not involve increase in 2-1 25 compensation and benefits. Seconded personnel shall receive, and audit of the Commission on Audit (COA) pursuant to in lieu of their respective compensation from their respective Article IX of the 1987 Philippine Constitution. All financial agencies or offices, the salaries, emoluments and all other transactions shall be governed by the applicable government benefits which their positions are entitled to receive from laws, rules and regulations. The COA shall prescribe the the MIC. guidelines of the audit of the MIC and the Fund under its management in accordance with international best practices. SEC. 32. Applicability of Republic Act No. 7656. - The In defining the scope of its audit, the COA shall coordinate MIC shall be subject to the provisions of Republic Act No. 7656 with the external auditor as provided under Section 35 of this or "An Act Requiring Government-Owned or -Controlled Act. The COA shall conduct a special audit every five (5) years. Corporations to Declare Dividends Under Certain Conditions to the National Government, and for Other Purposes". SEC. 37. Disposal of Investment Assets. - Notwithstanding any law, rules, regulations, or other issuances to the contrary, ARTICLE VII the disposal by MIC, pursuant to its mandate and functions, of shares, securities, and other interests and investments, FINANCIAL REPORTING FRAMEWORK AND shall not be covered by existing laws and regulations on AUDIT OF RECORDS disposal of government assets. SEC. 33. Financial Reporting Framework. - The financial ARTICLE VIII statements and reports shall be prepared, in accordance with the relevant Financial Reporting Standards and Principles. REPORTS AND RECORDS SEC. 34. Engagement of an Internal Auditor. - The SEC. 38. Joint Congressional Oversight Committee. - Board shall appoint an internal auditor, who shall provide There shall be created a Maharlika Investment Fund Joint audit reports to the Board of Directors. The internal auditor Congressional Oversight Committee (MIF-JCOC) to oversee, shall be independent from the management of the MIC and monitor, and evaluate the implementation of this Act. The shall be under the direct control and supervision of the Board MIF-JCOC shall be composed of seven (7) members each from of Directors. The PCEO shall ensure that the internal auditor, the House of Representatives and the Senate. The MIF-JCOC including the staff, shall have access to all documents and shall be co-chaired by the Chairpersons of the House information pertinent to the audit. Committee on Banks and Financial Intermediaries and the Senate Committee on Banks, Financial Institutions and SEC. 35. Engagement or- an External Auditor. - The Currencies. Board shall engage, for each accounting period or as soon as practicable after the commencement of the relevant accounting The Speaker and the Senate President shall designate the period, an internationally recognized auditing firm to be the other six (6) members of the MIF-JCOC of the House and the external auditor of the Fund and to audit its financial Senate from among the members of the House Committee on statements. Banks and Financial Intermediaries and the Senate Committee on Banks, Financial Institutions and Currencies, at least one The external auditor shall conduct annual audit for a (1) member of which shall be from the Minority. maximum engagement period of three (3) consecutive years !'. under such terms and conditions as may be determined by The MIC shall make a quarterly confidential submission 1· the Board of Directors. of all investments, whether planned or under negotiation by SEC. 36. Audit by the Commission on Audit. - The books the MIC and on the portfolio of the MIF, to the MIF-JCOC. I 1· and accounts of the MIC shall be subject to the examination I I I I 26 27 All audit reports of the internal and external auditors for of the implementation of the Santiago Principles and each accounting period shall likewise be submitted to the recommendations to improve compliance with such principles. MIF-JCOC. SEC. 43. Dispute Settlement. - The provision of existing SEC. 39. Right to Freedom of Information of the laws to the contrary notwithstanding, any dispute, controversy Public. - All document_s of the MIF and the MIC shall be or claim arising out of or relating to investments entered open, avail.able, and accessible to the public, as may be allowed pursuant to this Act or the breach, termination or invalidity by law, in both English and Filipino, including but not thereof shall be resolved by good faith negotiations between the limited to: parties. (a) All investments thereof, by the MIC and on the In the event that such negotiations do not succeed, any portfolio of the MIF; dispute, controversy or claim arising out of or relating to investments entered pursuant to this Act or the breach, (b) The Statement of Assets, Liabilities, and Net Worth termination or invalidity thereof shall be settled in accordance (SALNs) of the members and officials of the Board of Directors, with internationally accepted institutional systems of Risk Management Committee, and Advisory Body; arbitration of which the Philippines is a signatory. (c) The SALNs of those who appointed and designated The MIF-JCOC created under Section 38 hereof shall the said members and officials; regularly be apprised of the status of any dispute settlement proceeding. (d) Audit documents from the COA; and ARTICLE IX (e) Similar documents and information. OFFENSES AND PENALTIES SEC. 40. Provision for Access Rights and Retention Period of Records.' - The records of the MIC pertaining to SEC. 44. Violation of Disqualification Provision; its investment activities shall be secured and maintained Penalties. - A director or officer who willfully holds office pursuant to the rules of the National Archives of the while possessing any of the disqualifications or willfully Philippines. The relevant disclosure rules under Republic Act conceals a ground for disqualification as provided for in No. 8799 or "The Securities Regulation Code", Republic Act Sections 20 and 22 of this Act shall be punished with a fine No. 11232 or the "Revised Corporation Code of the Philippines", ranging from Five million pesos (P5,000.000.00) to Seven and other laws, rules and regulations shall apply to the MIC. million pesos (P7,000,000.00) at the discretion of the court, and The MIC shall be covered by Executive Order No. 2, s. 2016. perpetual disqualification from holding public office. When the All reports of the MIC pursuant to the disclosure rules under violation of this provision is injurious or detrimental to the existing laws shall be published on its website that shall be public, the penalty shall be a fine ranging from Ten million immediately updated and made easily accessible to the public. pesos (Pl0,000,000.00) to Fifteen million pesos (P15,000,000.00). SEC. 41. Reports of Government Financial Institutions SEC. 45. Violation by an Independent Auditor; to Staleeholders. - GFis with investments in the MIC shall Penalties. - An independent auditor who, knowingly certifies include the performance of their investments, a risk the corporation's financial statements despite its gross assessment of their exposure and strategies to manage such incompleteness or inaccuracy, its failure to give a fair and risks, and other relevant information in their annual reports. accurate presentation of the corporation's condition, or despite containing false or misleading statements, shall be punished SEC. 42. Compliance with Santiago Principles. - The audits required under this article shall include an assessment 28 29 with a fine ranging from Five million pesos (P5,000,000.00) lawful employment or livelihood of the whistleblower, shall, at to Seven million pesos (P7,000,000.00), imprisonment of six (6) the discretion of the court, be punished with a fine ranging years, and perpetual disqualification from holding public office. from One million pesos (Pl,000,000.00) to Two million pesos When the statement or report certified is fraudulent, or had (P2,000,000.00), and imprisonment of six (6) years. the effect of causing injury to the general public, the auditor or responsible officer m_aybe punished with a fine ranging from SEC. 49. Separate Liability. - Liability for any of the Ten million pesos (Pl0,000,000.00) to Fifteen million pesos foregoing offenses shall be separate from and in addition to (Pl5,000,000.00), imprisonment of six (6) years, and perpetual any other administrative, civil, or criminal liability under other disqualification from holding public office. laws, such as, but not limited to: SEC. 46. Acting as Intermediaries for Graft and Corrupt (a) Act No. 3815 or "The Revised Penal Code", as Practices; Penalties. - Any person, natural or juridical, who amended; allows itself to be used for fraud, or for committing or concealing graft and corrupt practices - by the directors, (b) Republic Act No. 3019 or the "Anti-Graft and Corrupt officers, or other employees of the MIC - as defined under Practices Act", as amended; pertinent laws, rules and regulations, shall be liable for a fine ranging from One million pesos (Pl,000,000.00) to Five million (c) Republic Act No. 6713 or the "Code of Conduct and pesos (P5,000,000.00), imprisonment of six (6) years, and Ethical Standards for Public Officials and Employees"; perpetual disqualification from holding public office. (d) Republic Act No. 1379; When there is a finding that any of its directors, officers, employees, agents, or representatives are engaged in graft and (e) Republic Act No. 7080 or "An Act Defining and corrupt practices, the Board of Director's failure to install: Penalizing the Crime of Plunder'·; (a) safeguards for the transparent and lawful delivery of services; and (b) policies, code of ethics, and procedures against (f) Republic Act No. 9160 or the "Anti-Money graft and corrupti"on shall be prima facie evidence of corporate Laundering Act of 2001", as amended; liability under this section. (g) Executive Order 292 or the "Administrative Code SEC. 4 7. Tolerating Graft and Corrupt Practices; of 1987"; Penalties. - A director or officer of the MIC who fails to sanction, report, or file the appropriate action with proper (h) Republic Act No. 9184 or the "Government agencies, allows or tolerates graft and corrupt practices or Procurement Reform Act''; fraudulent acts committed by a director, officer, employee, agent or representative shall be punished with a fine ranging (i) Republic Act No. 386 or "The Civil Code of the from Five million pesos (P5,000,000.00) to Ten million pesos Philippines", as amended; (Pl0,000,000.00), imprisonment of twenty (20) years, and perpetual disqualification from holding public office. (j) Republic Act No. 11232 or the "Revised Corporation Code of the Philippines"; and SEC. 48. Retaliation Against Whistleblowers. - A whistleblower refers to any person who provides truthful (k) Other relevant laws, rules, and regulations. information relating to the commission or possible commission of any offense or violation under this Act. Any person who, SEC. 50. Prescription of Crimes/Offenses. - The crimes/ knowingly and with intent to retaliate, commits acts offenses punishable under this Act shall prescribe in ten (10) detrimental to a whistleblower, such as interfering with the years. However, the right of the State to recover properties 30 3/ unlawfully acquired by the person involved, nominees, or (c) DOF-PMO Proceeds from the privatization of transferees in embezzlement and misappropriation of the funds government assets, the amount of which shall be determined shall not be barred by prescription, !aches, or estoppel. by the Privatization Council, subject to budgeting, accounting, and auditing laws, rules, and regulations subject to the ARTICLE X conditions provided under Section 6 of th.is Act; and MISCELLANEOUS PROVISIONS (d) Other sources, such as royalties and/or special assessments, subject to budgeting, accounting, and auditing SEC. 51. Appropriations. - A portion of the National laws, rules, and regulations. Government capital contribution,· either th.rough subscription of common shares or of preferred shares, under Section 6 The amount of contribution provided in Section 6 shall hereof shall be sourced from the following: be remitted to the National Treasury as a special account in the General Fund and are hereby appropriated solely for the (a) Bangko Sentral ng Pilipinas (BSP) dividends. For the payment of the MIC's capitalization subscribed by the National first and second fiscal years upon the effectivity of th.is Act, Government which shall not exceed fifty-one percent (51%) of one hundred percent (100%) of the BSP's total declared the authorized capital stock. Thereafter, all funds collected dividends, as computed under Republic Act No. 7653, also under Section 6 shall be deposited to the National Treasury known as the "New Central Bank Act", as amended by under the General Fund to support the national budget. Republic Act No. 11211, shall be remitted to the National Government for the capitalization of the MIC, in the amount SEC. 52. Statutory Counsel. - The Office of the not exceeding the Fifty billion pesos (P50,000,000,000.00) initial Government Corporate Counsel (OGCC) is the statutory counsel subscription of the National Government to the capitalization of the MIC and shall handle its legal affairs. of the MIC under th.is section: Provided, That the Monetary Board may recommend to the President of the Philippines the SEC. 53. Corporate Term of the MIC. - The MIC shall reduction of BSP's dividend contribution to the MIC whenever exist for a term of thirty-five (35) years from the date of the economic conditions may warrant; thereafter, the dividends of effectivity of this Act, unless sooner repealed or extended by the BSP shall be remitted to the National Government to fund Congress. the increase in the capitalization of the BSP in accordance with Section 2 of Republic Act No. 7653, as amended by SEC. 54. Implementing Rules and Regulations. - Within Republic Act No. 11211; ninety (90) days from the effectivity of this Act, the Treasurer of the Philippines, in consultation with the Founding GFis, (b) Government share in PAGCOR, and revenue from shall promulgate the necessary rules and regulations for the other government-owned gaming operators and/or regulators. implementation of th.is Act. Ten percent (10%) of the National Government's share from the income of the PAGCOR, as provided for in Presidential SEC. 55. Suppletory Application. - The prov1s10ns of Decree No. 1869, as amended: Provided, That the share Republic Act No. 11232, also known as the "Revised earmarked for the Universal Health Care Act under Section Corporation Code of the Philippines", to the extent relevant and 37(b) of Republic Act No. 11223 sh.all not in any manner be consistent with this Act, shall be applicable to the MIC. diminished: Provided, further, That the above funding from PAGCOR will be for a period of five (5) years. Accordingly, SEC. 56. Separability Clause. - If any provisions of other government-owned gaming operators and/or regulators this Act are declared invalid or unconstitutional, the remaining shall also contribute ten percent (10%) of their revenues from parts or provisions not affected shall remain valid. gaming operations for a period of five (5) years; 32 33 SEC. 57. Repealing and Amendatory Clause. - All acts, This Act was passed by the Senate of the Philippines as executive orders, administrative orders, proclamations, rules Senate Bill No. 2020 on May 31, 2023 and adopted by the and regulations or parts thereof inconsistent with any of the House of Representatives as an amendment to House Bill provisions of this Act, are hereby repealed or modified No. 6608 on May 31, 2023. accordingly. Particularly, the following laws or provisions of laws are hereby expressly amended to the extent of ensuring the full implementation of the provisions of this Act: RE~ Secreta,-y General (a) Section 2 of Republic Act No. 7653 or the "New House of Representatives Central Bank Act", as amended by Republic Act No. 11211; and (b) Presidential Decree No. 1869, otherwise known as the "PAGCOR Charter, as amended", without prejudice to

Section 37 of Republic Act No. 11223 or the "Universal Health Approved: 1 8 JUL2023 Care Act". SEC. 58. Effectiuity. - This Act shall take effect immediately upon its publication in the Official Gazette or in a newspaper of general circulation in the Philippines. FERDINAND MUAi?DEZ MARCOS JR .• After effectivity, this Act shall also be promulgated in Filipino. Approved, 0 Speaker of t'1e House of Reprt.!sentalives ii,nri 111 Ii1iiiiiirili1is111 PBBM002481