The suspension of the implementation of the Maharlika fund has little to do with the concerns of banks falling short of capital requirements, and is more of a prelude to the upcoming announcements President Ferdinand Marcos Jr. is set to make in the coming weeks.

According to reliable sources within government ranks, the order of Marcos is among the moving parts in an impending Cabinet shake-up.

One source told Rappler that the temporary suspension was ordered so that Marcos could look into the selection process of applicants and nominees of the Maharlika Investment Corporation (MIC), the state-run company that would manage the funds.

Under the current rules, heads of the National Economic and Development Authority, Department of Budget and Management, and Bureau of the Treasury will comprise an advisory body, and will be the ones responsible for coming up with a list of names of competent individuals who could be part of the MIC board.

Nominations have since closed last September 27 and the list has already been transmitted to the President. Marcos needs to choose from that roster to appoint the MIC president and CEO, as well as directors.

But could Marcos be looking at someone not on the list?

Another source who has some access to such talks said, “Definitely.”

Will it be Diokno?

According to circulating rumors, Finance Secretary Benjamin Diokno is being strongly considered to head the MIC. But the source said Diokno was “naturally” not on the list, considering that other economic managers comprise the advisory body.

Diokno earlier said he does not comment on rumors. He has also said that the MIC will be up and running by the end of the year.

This latest development further intrigues business circles, especially since Marcos is headed to Saudi Arabia to pitch the controversial wealth fund to foreign investors, among other items on his agenda.

“Part of the discussion could be the presentation of the Maharlika fund to the Kingdom of Saudi Arabia and its businesses,” Foreign Affairs Assistant Secretary Daniel Espiritu said on Monday, October 16.

Saudi Arabia’s Public Investment Fund is among the largest and most diversified sovereign wealth funds in the world, boasting of $700 billion worth of assets under its management.

With no one named to the MIC yet, alongside concerns of banks’ capital requirements, can Marcos really pitch his pet economic project?

Sources said that should the well-known Diokno be chosen as the MIC chief, it could give some clarity on the direction of Marcos’ economic agenda.

Meanwhile, critics view the pause in the Maharlika fund’s implementation as some sort of silver lining.

For instance, to Senator Koko Pimentel, who urged Marcos to veto the Maharlika bill after Congress passed the measure in May, it’s a “very good development.”

“The law has a lot of defects. The concept has not been fully studied from the very start. Hence, we should not wonder why apparently the law is not ready for implementation. Good that the Marcos administration appears to listen to reason.”

Banks earlier confirmed what economists feared. The country’s two major state banks – Landbank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) – are left weakened after the MIC took P75 billion of their capital to set up the controversial sovereign fund.

Both Landbank and DBP have requested for “regulatory relief” from the capital requirements of the Bangko Sentral ng Pilipinas. – Rappler.com

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