PRESIDENT Ferdinand R. Marcos Jr. on Monday appointed Office of the Presidential Adviser for Investment & Economic Affairs (OPAIEA) Executive Director Rafael D. Consing Jr. as the first head of the Maharlika Investment Corporation (MIC), and House Committee on Ways and Means Chairman Joey Sarte Salceda promptly called him the right person for the job.
However, a warning against the risks of billions of public funds easily being lost as a result of the removal of stricter provisions under the revised implementing rules and regulations of the MIC was raised by a former lawmaker, who called the Maharlika law “a dangerous law.” This danger, said lawyer Neri Colmenares, “is to hundreds of billions of public funds,” and the risk is “now further worsened by the new IRR promulgated by Malacañang.”
As Maharlika stands at the crossroads of finance, development, and public administration, economist-lawmaker Salceda said Consing’s robust background in three major positions in the corporate world and the Palace make him the ideal leader for the crucial role.
With his new designation, Consing now serves as the President and Chief Executive Officer (PCEO) of the corporation, which will manage and invest the Maharlika Investment Fund (MIF) in line with international best practices such as the Santiago Principles.
He will have a three-year term and will be responsible for diversifying the portfolio of the country’s first sovereign wealth fund.
Malacañang described Consing as an “accomplished, results-driven, and multi-awarded C-level executive with a profound depth of experience in corporate governance, mergers and acquisitions, corporate finance, global capital markets, stakeholder relations, and business strategy development.”
While serving at the OPAIEA, he provided the President advice on investments and economic agenda.
Before his government stint, he worked in high-profile positions in these companies: Senior Vice President & Chief Financial Officer of International Container Terminal Services Inc.; Managing Director roles at HSBC Hong Kong and HSBC Singapore; and Vice President and Treasurer for Aboitiz & Co., Inc. and Aboitiz Equity Ventures, Inc. among others.
Consing was a graduate of De La Salle University, Manila, and has also completed the Stanford University Graduate School of Business’s Emerging CFO: Strategic Financial Leadership Program in 2016.
The Palace announcement came a week after Marcos approved the revision in the Implementing Rules and Regulations (IRR) of Republic Act No. 11954 or the Maharlika Investment Fund of 2023.
The updated IRR provides the President the power to accept or reject recommended appointees in the MIC.
It also removed the following requirements for members of the MIC board of directors: master’s degree; 10 years of experience in finance, investments or economics; strong track record; and ethical standards.
Government economic managers earlier reiterated the MIF is expected to become operational before the end of the year.
In his statement, Salceda said: “I enthusiastically welcome the appointment of Rafael Jose ‘Joel’ Consing as President and CEO of the Maharlika Investment Corporation, who has extensive experience in both financial management and the management of large infrastructure projects. In that sense, he is an excellent fit for both the financial and developmental functions of the Fund. He is the man for the job,” he said.
“He will also be able to attract investments into the fund, as he has been awarded many times as Best CFO for Investor Relations,” Salceda added.
He recalled working with Secretary Frederick Go and Consing in the crafting of the amendments to the CREATE Law and the Public-Private Partnership Code.
Milestone
Meanwhile, House Committee on Banks and Financial Intermediaries Chairman Irwin Tieng said the enhanced provision of the MIF’s IRR, aimed at fortifying the autonomy and governance of the MIC Board of Directors, marked “a pivotal milestone in the Philippine financial landscape.”
“We are delighted to witness the culmination of efforts to fortify the MIC through enacting comprehensive and empowering rules,” Tieng, sponsor of the MIF bill, said. “The strengthened independence of the Board of Directors is fundamental to ensuring prudent and effective decision-making, safeguarding the corporation’s integrity, and promoting financial stability.”
According to Tieng, the new IRR signifies a crucial step in advancing the governance framework of the MIF, laying the groundwork for enhanced transparency, accountability, and sound decision-making.
Senior Deputy Speaker Aurelio Gonzales Jr. said he was confident the IRR would bolster the autonomy of the MIC board of directors, fostering an environment where the MIC could be managed with unimpeded independence and shielded from any unwarranted political influence.
“The IRRs, approved by no less than President Ferdinand R. Marcos Jr., are a testament to the commitment to reinforce the governance structure of the MIC, ensuring that the board of directors possesses the necessary freedom to administer the fund without external interference, thus bolstering its effectiveness and credibility in the financial landscape,” he said.
He said the completion of the IRR for the MIC represented a crucial step in preserving its independence.
“This independence will enable the MIC to perform its crucial role in investment activities, contributing significantly to the economic growth and stability of the nation,” he added.
Risky setup
Bayan Muna Chairman Neri Colmenares struck a dismal note, however. He claimed on Monday that the new IRR renders more public funds susceptible to being lost in the Maharlika scheme.
“The new IRR further solidified President Ferdinand Marcos Jr.’s control of the Maharlika Corporation increased when it gave the president more powers to select friendly members of the Maharlika Board of Directors as well as the entry of friends from big business. The old IRR was more strict in imposing qualifications and auditing rules,” he said in a statement.
“It is reasonable for people to suspect that President Marcos amended the old IRR because he may have some trusted friends that did not qualify as directors under the old IRR, which is why qualifications were laxed in the new IRR. Sec. 20 of RA 11954, or the Maharlika Law, states that ‘The regular directors shall be appointed by the President of the Philippines upon recommendation of the Advisory Body’, which means the President cannot select his own board of directors outside the list given by the Advisory Board,” he added.
“Now, Sec. 30 of the new IRR provides that ‘xxx the President may either accept or reject the recommendation of the Advisory Body; and, That, the President may require the Advisory Body to submit additional names of nominees’. This allows him to reject the Board’s nominees and practically order it to submit more names, which could include friendly directors that President Marcos wants appointed, even if they do not have the educational and expertise qualifications required in the old IRR,” said Bayan Muna Chairman Neri Colmenares, who was among the Supreme Court petitioners against the Maharlika law.
Worse, Colmenares said the new IRR provided provisions that could ensnare more public funds and GOCCs to contribute to the fund.
Section 6 of the IRR states that “other contributions to the MIC capitalization shall be determined by subsequent law or any appropriate body.”
“This is not expressly provided in RA 11954. This opens up the possibility that a new law or an ‘appropriate body’ can order more public funds or GOCCs to fund the Maharlika Corporation. Of course, a new law allowing the SSS and GSIS to contribute to Maharlika could always be passed later,” said the former Bayan Muna solon.
Colmenares added that friends of the President from big business can now come in when the law did not provide so because the IRR amended the Maharlika law.
“Sec. 6 of RA 11954 states that ‘[2] Preferred shares of one billion two hundred fifty million [1,250,000,000] xxx is to be made available for subscription by the National Government, its agencies or instrumentalities, GOCCs or GFIs.’ sec. 6 of the new IRR states that “Preferred shares of One billion two hundred fifty million [1,250,000,000] xxx to be made available for subscription by the National Government, its agencies or instrumentalities, GOCCs or GFIs, as well as reputable private financial institutions and corporations. The new IRR cannot provide the entry of ‘private’ corporations if the law does not say so. The IRR cannot provide for something that is beyond the provisions of the law,” said Colmenares.
“It is not unreasonable to suspect that the delay in the IRR promulgation, beyond the 90-day period required by the law, was mainly to insert provisions that will allow friendly directors and big business cronies to come into the Maharlika Corporation, further endangering the public funds contributed to the fund,” said the former Bayan Muna congressman.
Colmenares reiterated Bayan Muna’s claim about the dangers of the Maharlika fund scheme.
“It must be noted that Sec. 8 of the new IRR states that ‘The MIC may compromise or release, in whole or in part, any claim of or settled liability to the MIC, xxx’. This means that the Maharlika Board has the power to condone the liabilities of certain business interests to the MIC. This brings to mind the cronyism and behest loans to crony corporations in the previous administrations, including President Marcos’ father himself,” he added.
“This is compounded by the fact that sovereign guarantees for loans from the MIC can also come into play. Sec. 18 of the new IRR states that ‘No guarantee involving financial liability arising from any action of the MIC shall be binding upon the Philippine government without obtaining the written authority of the proper authorities xxx’. This means that a liability of the MIC could also be paid for by the Filipino people, as long as the MIC obtains the approval of a ‘proper authority’. The Maharlika law is a dangerous law. This danger to hundreds of billions of public funds is now further worsened by the new IRR promulgated by Malacañang,” Colmenares said.
