20232802 marcos
Philippine President Ferdinand Marcos Jr. Image Credit: AP

The establishment of the Philippines' first sovereign wealth fund will proceed, according to President Ferdinand Marcos Jr., who said the government is only fine-tuning some rules to make it ideal.

"The concept of the Maharlika Fund as a sovereign fund remains a good one and we are still committed to having it operational before the end of the year," Marcos said at a briefing on Thursday before leaving for Saudi Arabia to attend the ASEAN-Gulf Cooperation Council Summit.

Marcos made the comments after a memorandum signed by his Executive Secretary Lucas Bersamin released on Wednesday showed Marcos has suspended the implementation of the law he signed in July "pending further study."

The Philippine leader said he was "a bit alarmed" by the news that the government has put the Maharlika Investment Fund on hold. Setting it up "proceeds apace" and the government is only aiming to make improvements "specifically to the organizational structure" of the fund, he added.

"We should not misinterpret what we have done as somehow a judgment on the rightness or wrongness of the Maharlika Fund. On the contrary, we are just finding ways to make it as close to perfect and ideal as possible," he said.

Marcos said he's planning to introduce the Southeast Asian nation's wealth fund to Middle Eastern countries as he visits Saudi Arabia.

Bersamin on Wednesday said Marcos wanted to "study carefully" the implementing rules of the law to ensure there will be safeguards for transparency and accountability.

The law creating the Maharlika Investment Fund was signed into law less than a year after the bill was introduced in Congress, with proponents saying it will help prop up the economy following a crippling pandemic. The fund will pool money from state banks and government-controlled corporations and invest these in currencies, bonds, equities and infrastructure projects.

But critics have said the wealth fund plan was ill-timed and will make more sense when the government has turned in a budget surplus. Former central bank chief Felipe Medalla last year warned that the Maharlika Fund could end up like Malaysia's scandal-tainted state investment fund 1MDB if not governed properly, before he eventually backed the plan.