Filipinos should support the creation of the Maharlika Investment Fund as it is a vehicle for the country’s sustained economic growth in the years ahead.
That was the main point of National Treasurer Rosalia de Leon when she appeared before a media forum recently.
She gave assurances that the MIF, which is our version of what’s called a Sovereign Wealth Fund in other countries, has ample safeguards or safety nets to ensure proper and transparent utilization and prevent mismanagement.
First of all, she pointed out, Congress will have oversight functions over the MIF, which will eventually become the Maharlika Investment Corporation or MIC.
The MIF will have both internal and external auditors who will submit regular reports its financial performance.
The oversight committee will include seven members each from the House of Representatives and the Senate.
Another important provision is that the country’s social protection institutions such as GSIS, SSS, Pag-IBIG and PhilHealth will be prohibited from investing in the fund, a provision clearly stipulated in the version recently passed by the Senate.
The National Treasurer also pointed out that government financial institutions (GFIs) in the country have ample resources to support the MIF.
She said Landbank and the Development Bank of the Philippines each have investible funds.
Landbank, owned by the government, has P1.3 trillion in investible funds, but will infuse only P50 billion into the MIF, or roughly three percent.
The DBP, on the other hand, has P850 billion in investible funds, but will put in just P25 billion into the MIF.
To the argument raised by critics that the MIF should consist solely of surplus funds, de Leon noted that even countries with no current account surplus such as Indonesia, India and Vietnam, have established their own sovereign wealth funds to support their priority development projects.
She cited the case of Indonesia which also has its sovereign wealth fund, the Indonesia Investment Authority (INA).
Indonesia, like the Philippines, she said, is also operating on a fiscal deficit.
But the government contributed $2 billion to set up the INA and also transferred assets worth $3 billion.
So, even while they have a fiscal deficit, they still went ahead and provided capital for the INA.
The MIF will be used to invest in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate and infrastructure projects.
And just as important, it is fully aligned with the Medium-Term Fiscal Framework and 8-point Socio-Economic Agenda of the Marcos administration that envisions sustained economic growth in the years ahead.