Maharlika fund

[In This Economy] How Marcos is politicizing the Maharlika fund

JC Punongbayan

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[In This Economy] How Marcos is politicizing the Maharlika fund
Rather than insulate Maharlika from politics, the revised IRR made Maharlika much more susceptible to politics. The President now has greater control over who gets appointed to key positions.

On November 13, 2023, President Ferdinand Marcos Jr. appointed Rafael Consing Jr. to be the first president and chief executive officer (CEO) of the Maharlika Investment Corporation (MIC), which will manage Marcos’s pet Maharlika Investment Fund (MIF).

On the surface, he seems totally qualified and experienced.

Earlier this year, he was appointed by Marcos head of the Office of the Presidential Adviser on Investment and Economic Affairs.

Before that, Consing had spent 15 years with ICTSI or International Container Terminal Services, Inc. as senior vice president and chief financial officer. Founded by tycoon Enrique Razon, ICTSI is a “global port management company” and supposedly the “Philippines’ largest multinational and transnational company.”

Before that, Consing worked with HSBC (as managing director) and Bankers Trust Company (as vice president for corporate finance). He was once vice president and treasurer at Aboitiz & Company Incorporated and Aboitiz Equity Ventures Incorporated. You can find all this in his LinkedIn profile.

But let’s scrutinize Consing’s appointment a bit more. Red flags appear instantly. (READ: Marcos’ Maharlika chief qualified for post only after revised appointment rules)

Relaxed qualifications

Consing’s appointment came just two days since the government released the new version of the implementing rules and regulations (IRR) of the Maharlika Investment Fund law.

Among the biggest edits in the new IRR was the relaxation of qualifications for key officials of the MIC.

For instance, in the original IRR, the president and CEO (or PCEO) of Maharlika “must have…an advanced degree (MBA, MA, MSc, PhD) in Finance, Economics, Business Administration, or a related field from a reputable university.”

Based on this previous provision, Consing would not qualify as PCEO. He does not have the requisite “advanced degree.”

Based on his LinkedIn, he graduated with an A.B. Political Science degree from De La Salle University in 1989. That’s it. He listed his attendance in 2016 to a leadership program at Stanford, but that is not at all an “advanced degree.”

This alone is a smoking gun. It would appear that Maharlika Investment Fund’s implementing rules and regulations were tweaked to accommodate Consing’s lack of an advanced degree.

But the new IRR also tweaked the experience qualifications for the PCEO.

Originally, the PCEO should have a “minimum of ten (10) years experience in finance or investment, with at least ten (10) years in a senior leadership role in a reputable financial institution, public/private sector organization; prior experience with ESG criteria and sustainable investment is preferred.”

This was replaced in the new IRR with 10 years of “management experience, including extensive commercial lending/credit administration experience.”

Apart from being simpler, the new qualifications are markedly different.

Being an expert in finance or investment typically involves experience in managing portfolios, making investment decisions, and understanding markets and financial instruments.

But if you’re someone experienced in management, that points to skills in running operations, managing teams, and making strategic decisions within an organization. And if you have commercial lending/credit administration experience, that is related to assessing credit risks, managing loan portfolios, and understanding credit markets.

For the PCEO of a sovereign wealth fund (note that Maharlika is more properly a “strategic investment fund”), you need someone with deep experience in finance or investment, not management or commercial lending/credit administration per se.

Do the changes imply that Maharlika will focus more on lending – an abnormal priority for a supposed sovereign wealth fund? Again, this goes to the fact that Maharlika’s goals are confused – a point made in a June 2023 discussion paper published by myself and 20 other faculty members of the UP School of Economics.

Or, were the experience qualifications for PCEO modified to better suit Consing’s own working experience in, say, ICTSI and Aboitiz?

It seems Consing has more than three decades of experience in the private sector. But if he’s so experienced, why the need to tweak the original experience qualifications? Doesn’t he strictly meet the old qualifications?

Other relaxations

It’s not just the PCEO. The new Maharlika IRR also relaxed qualifications for the chief investment and operating officer (CIOO).

Before, the CIOO was required to have a “master’s or advanced degree in Finance, Economics, Business administration, or a related field,” as well as “a proven track record of at least ten (10) years in senior investment management roles…”

All these were reduced to: “The CIOO must have a degree in Finance, or a related field and has proven experience in managing a team of financial analysts and investment professionals.”

The original list of nine skills the CIOO must possess – including “expert knowledge of financial markets, investment instruments, and portfolio management strategies” and “proficiency in quantitative analysis, financial modeling, and risk assessment” – was also totally scrapped.

Relaxed, too, were qualifications for the regular and independent directors of the MIC board.

Before, they all had to have a master’s degree, 10 years of experience in “finance, investments, economics, business, or a related field,” strong track record, and “demonstrated commitment to the highest ethical standards, integrity, and compliance with relevant laws and regulations.”

These are actually good provisions! Only, these were all stricken out in the new IRR.

Again, why? Is Marcos paving the way for future appointees who couldn’t meet the original qualifications? Why are they bending the rules so much?

President has more power

The Maharlika law states that the PCEO of Maharlika – as well as other officials like regular and independent directors – will be appointed by the President.

But in the original IRR, the MIC’s Advisory Body (composed of three economic officials) is supposed to “solicit nominations and/or applications for vacancies in the PCEO” and other key seats.

In the new IRR, the Advisory Body shall no longer solicit. Instead, they will come up, by themselves, with a shortlist that they shall submit to the President. This is ostensibly “in the interest and exigency of service.”

Most revealing is that the new IRR added a totally new provision, wherein “the President may either accept or reject the recommendation of the Advisory Body” and “may require the Advisory Body to submit additional names of nominees.”

This is very illuminating.

Back in September 30, it was reported that the MIC’s Advisory Body – comprising Budget Secretary Amenah Pangandaman, NEDA Secretary Arsenio Balisacan, and OIC-Treasurer Sharon Almanza – thoroughly screened candidates for Maharlika’s PCEO position as well as the five seats for regular and independent directors.

Seven people initially applied as PCEO, but only three were shortlisted; nine applied to be regular directors, but only four were shortlisted; 13 applied to be independent directors, but only six were shortlisted. The final shortlist of 13 people was supposedly submitted by the Advisory Body to Malacañang on October 2.

Said Secretary Pangandaman: “We carefully deliberated and took into consideration not only the qualifications and experience of each candidate but also their potential in achieving our vision of a development fund that will truly achieve our Agenda for Prosperity.”

Then on October 12, 10 days after receiving the short list, Marcos suddenly issued a memo suspending the IRR. Many people thought this was because state-owned banks, whose capital has been reduced by Maharlika, are now seeking “regulatory relief” from the Bangko Sentral ng Pilipinas.

But according to a Rappler report, insiders said that “the temporary suspension was ordered so that Marcos could look into the selection process of applicants and nominees of the [MIC].”

If the short list was vetted by the economic team and comprised good people, why did Marcos reject and bypass it? Does he have preferred people in mind who didn’t make it to the short list?

Did this inspire the extra provision in the new IRR explicitly allowing him to reject the names submitted by the Advisory Body? Why couldn’t Marcos’ preferred people win the Maharlika positions by merit alone?

We should also ask: exactly what role, if any, did billionaire tycoons play in the appointment of the first PCEO of Maharlika?

Note that Consing used to work for the Razon and the Aboitiz groups, both of which now figure prominently in the Private Sector Advisory Council (PSAC). It’s a group of billionaire tycoons that has the ear of Marcos and regularly advises the President on policies and programs that can promote “infrastructure, agriculture, digital infrastructure, healthcare, jobs, and tourism.”

Will other key positions in the MIC be populated as well by names affiliated with (or had previously worked with) this powerful group of billionaire tycoons? We should watch out for this.

Audit, risk management rules removed

Besides highly-suspect changes in the parameters for hiring people, the new Maharlika IRR also glaringly removed key provisions on audit and risk management.

First, detailed provisions about the MIC’s Audit Committee (its composition as well as five main responsibilities) were reduced to just one sentence: “The Board shall organize an Audit Committee and prescribe its functions and memberships.” This is no different from the provision in the original law, saying that the Board shall “constitute an Audit Committee from among its members.”

Second, the list of nine specific responsibilities of the risk management committee – tasked to identify, assess, and mitigate potential risks that could affect the fund’s investments – has also been removed entirely.

These two big changes mean there are fewer (rather than more) guardrails against abuse and mismanagement. Also, these policies and responsibilities are now up to the discretion of the Board.

That’s dangerous, not least because all the MIC board members are presidential appointees. The appalling lack of independence is arguably the hugest risk here. Not only does it violate the Santiago Principles (a set of principles for sovereign wealth funds worldwide), but it also endangers the viability of the MIF itself (look at what happened with Malaysia’s 1MDB).


Some proponents and supporters of Maharlika lauded the new IRR.

Former national treasurer and current Monetary Board member Rosalia de Leon said, “The President wants the Board to be insulated from political influence and considerations and would like to give the leeway to set the qualifications in the best way they know how based on their experience and expertise in fund management.”

Meanwhile, Speaker Martin Romualdez, the President’s cousin, said, “This move is a significant step towards enhancing corporate governance and ensuring that the MIF is managed with the utmost transparency and accountability … The autonomy of the MIC Board allows for more objective and effective decision-making, free from undue political influence.”

This was echoed by Budget Secretary Pangandaman who said, “This will…improve accountability, openness, and efficacy in carrying out the law’s provisions.”

These statements reek of gaslighting.

Rather than insulate Maharlika from politics, the revised IRR made Maharlika much more susceptible to politics. The President now has greater control over who gets appointed to key positions. This is manifest in the way Consing became the first PCEO.

Also, rather than ensure greater transparency and accountability, the removal of otherwise sound audit and risk management rules made the IRR much less transparent than before. The revisions also made the Maharlika board even more overpowered and less accountable than it already is, having more discretion on which guardrails will be implemented or not.

All in all, things are not looking good for Maharlika. As early as now, rules are being relaxed and bended left and right. I expect Maharlika to be politicized beyond repair moving forward. If that’s the case, who will want to invest in it or make deals with it? –

JC Punongbayan, PhD is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them. JC’s views are independent of his affiliations. Follow him on Twitter (@jcpunongbayan) and Usapang Econ Podcast.

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  1. ET

    Thanks again to Prof. JC Punongbayan for another enlightening article on a very relevant economic topic: Maharlika Investment Fund. I agree that, as of the moment, it is already “politicized” beyond repair. But, by the way, will PBBM repair it when he is the one who broke it in the first place? Lastly, my answer to: “… who will want to invest in it or make deals with it?” Perhaps, stupid billionaires and governments who have lots of money to waste and are not accountable to anybody or can escape or avoid accountability.

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JC Punongbayan

Jan Carlo “JC” Punongbayan, PhD is an assistant professor at the University of the Philippines School of Economics (UPSE). His professional experience includes the Securities and Exchange Commission, the World Bank Office in Manila, the Far Eastern University Public Policy Center, and the National Economic and Development Authority. JC writes a weekly economics column for He is also co-founder of and co-host of Usapang Econ Podcast.