Photo credit: DOF

During the 12th Board Meeting of The Maharlika Investment Corporation (MIC) led by Finance Secretary and MIC Chairperson and Department of Finance Secretary Ralph Recto, the MIC unveiled its brand-new investment and risk management framework.

This framework is a major step forward, as it outlines the guiding principles, governance structure, and high-level investment strategies for the MIC from now through 2028.

Here’s what’s happening: the framework details the policies, strategies, and risk management practices that will steer the MIC’s investment decisions and portfolio management. This setup is crucial for the MIC, as Republic Act No. 11954 mandates having such a framework before diving into investments.

The MIC has also joined the ranks of the International Forum of Sovereign Wealth Funds (IFSWF)! Secured on July 11, 2024, this membership is a huge deal. It’s like getting a VIP pass to a global club for sovereign wealth funds. With this membership, the MIC can now tap into a worldwide network of experts, gain international recognition, and take part in exclusive events, like the IFSWF Annual General Meeting in Muscat, Oman, from November 3 to 6, 2024.

So, what exactly is the MIC? It’s been set up as the primary channel for mobilizing and utilizing the Maharlika Investment Fund (MIF). The MIC is backed by an impressive capital stock of 500 billion pesos (around 8.9 billion dollars).

Of this, 375 billion pesos are available in common shares for the National Government, its agencies, Government-Owned and Controlled Corporations (GOCCs), or Government Financial Institutions (GFIs). The remaining 125 billion pesos are set aside as preferred shares, which can also be subscribed to by reputable private financial institutions and corporations.

Here’s an interesting detail: 125 billion pesos (about 2.2 billion dollars) of the common shares are initially subscribed from the funds of the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP). This also includes contributions from the National Government, such as dividend remittances from the Bangko Sentral ng Pilipinas (BSP), shares from PAGCOR and other government-operated gaming income, privatization proceeds, and various royalties and special assessments.