DBP confirms suspension of Maharlika fund implementation

State-run Development Bank of the Philippines on Wednesday confirmed the suspension of the implementation of the Maharlika Investment Fund (MIF).

“DBP confirms receiving a memorandum from the Office of the Executive Secretary concerning Republic Act No. 11954 [Maharlika Investment Act of 2023]. The memorandum directs the Bureau of Treasury to suspend the implementation of the implementing rules and regulations of RA 11954 ‘…in coordination with DBP and Landbank of the Philippines’,” the bank said in a statement sent to Manila Standard.

“DBP shall strictly abide by the directive,” the bank said.

The Bureau of Treasury issued the IRR of RA 11954 on Aug. 28 for implementation of the MIF, while Land Bank and DBP remitted P50 billion and P25 billion, respectively to the Treasury in September as their share in the sovereign wealth fund.  The banks’ contributions were put in escrow prior to the operation of Maharlika Investment Corp. (MIC) which would manage the fund.

MIC has an initial capitalization of P125 billion. LandBank and DBP already transferred their contributions on Sept. 14 and Sept. 15., respectively.  The remaining P50-billion capitalization would come from the national government.

Finance Secretary Benjamin Diokno said the remittance of the two largest state-owned financial institutions in the country would pave the way for the full operationalization of the MIC.

The Office of the President, however, issued a memorandum on Oct. 12 asking the Treasury, LandBank and DBP to suspend the implementation of the MIF, pending further study to ensure the fund’s objectives are realized for the country’s development, with safeguards in place for transparency and accountability.

Both banks earlier requested regulatory relief from the Bangko Sentral ng Pilipinas to comply with the minimum capital requirements following their capital infusion to the MIF.

Under the BSP regulations, the contribution of the two banks to the MIF would be deducted from the computation of their capital.  LandBank and DBP, which are both universal banks, asked the BSP for regulatory relief so that the amount would not be deducted against their capital requirement.

Landbank has an authorized