Marcos pushes Maharlika Fund implementation anew

CAGAYAN DE ORO CITY - President Ferdinand Marcos Jr. said he will push through with the implementation of the Maharlika Investment Fund (MIF) law before the year ends, adding he would continue to introduce the sovereign fund internationally.

Marcos also denied news reports that the government put the Maharlika Fund on hold. He said while preparations are at pace, more improvements are underway for the sovereign fund’s organizational structure.

“The organization of the Maharlika Fund proceeds at pace. And what I have done though is that we have found more improvements that we can make specifically to the organizational structure of the Maharlika Fund,” he said.

Marcos said that the government is committed to pushing forward with the implementation of the MIF. “We are still committed to having it operational before the end of the year. So we should not misinterpret what we have done as somehow a judgment on the rightness or wrongness of the Maharlika Fund,” he said.

He assured that consultations with various stakeholders are being done to ensure that the operations of the MIF would become better.

Marcos signed the MIF Act of 2023 in July this year, thus putting up the Philippines’ first-ever sovereign wealth fund that will support his administration’s economic goals.

With the Republic Act (RA) No. 11954 signed into law, the country will have the capacity and capability to invest in all of these extremely important projects such as agriculture, infrastructure, digitalization as well as strengthening the value chain.

Government financing institutions will now pool together non-debt financial resources so as to not crowd out other lending obligations that they need to fulfil under their respective mandates. Moreover, the fund has the potential to funnel in external financing, reducing the government’s burden to finance infrastructure through borrowings, taxes.

Marcos assured the public that the fund will be managed by highly competent personnel with a good track record and outstanding integrity. “We remain steadfast in our commitment to transparency, accountability, and good governance in this massive and purposeful undertaking. I assure you that the resources entrusted to the fund are taken care of with utmost prudence and integrity,” he said.

Following the MIF Act signing, the Administration is set to prepare the implementing rules and regulations for the creation of the Maharlika Investments Corp. (MIC), which will be the sole vehicle for mobilizing and utilizing the MIF for investments.

The MIC is expected to have at least P75 billion in paid-up capital this year, with P50 billion sourced from the Land Bank of the Philippines and P25 billion from the Development Bank of the Philippines. The Fund will be invested in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, joint ventures, mergers and acquisitions, real estate and high-impact infrastructure projects, and projects related to sustainable development.

Marcos previously said that he turned down proposals to be part of the MIF, saying that it must be run by competent and independent financial managers to insulate it from political interference.

Under RA 11954 or the Act Establishing the MIF, the Secretary of Finance is merely the ex officio chairperson and will not run the Fund. It will be governed by the nine-member MIC chaired by an Independent Director.

According to Marcos, the only way for the fund to succeed is to free it from political interference, as the government looks at potential investments and fund operations in a cold-calculating manner. He expressed confidence that the government can find all the competent people that can handle the fund properly, as long as it is well-organized structurally.

“Structurally, we removed the political decisions from the fund and those political decisions are left with the bureaucracy, the political bureaucracy, and the fund is left to be a fund and operating on a sound and proactive financial basis,” he pointed out. “The point being, as long as we manage it properly, I contend that we have some of the best economic managers both in government and in the private sector that we can count on to run this fund properly.”

Some senators and economists are opposed to the MIF saying this ran contrary to the principles of fiscal prudence, pension fund solvency, good governance and transparency. (Mindanao Examiner)