The Maharlika Investment Fund, the country’s inaugural sovereign wealth fund, has garnered optimism from the head of the government’s economic team despite concerns about the challenges of securing investments. The team aims to initiate the process before the year concludes, actively pushing for progress.
During a briefing, Department of Finance Secretary Benjamin Diokno asserted that the Philippines holds a favorable position to attract resources for the Maharlika Investment Fund (MIF).
Volatile economic conditions, both domestically and abroad, may present challenges in financing the MIF.
However, Diokno dismissed global distress, emphasizing the recent upgrade from Fitch that has boosted the nation’s appeal to potential investors.
This year, the global economy anticipates a slowdown due to factors such as sustained elevated commodity prices, high interest rates, and recessionary fears.
Simultaneously, the Philippine economy is forecasted to experience slower growth compared to the previous year.
To counteract external headwinds that could hinder the achievement of macroeconomic and fiscal targets, Diokno advocated for the establishment of the MIF.
He highlighted the fund’s role in introducing a new growth catalyst by expediting the implementation of strategic and high-impact large infrastructure projects, stimulating economic activity and mitigating the impact of weaker external conditions on the economy.
With the MIF’s approval from both houses of Congress and impending transmission for President Marcos’ signature, the finance chief anticipates the fund’s full operationalization by year-end.
President Marcos is expected to sign the MIF into law before delivering his second State of the Nation Address on July 24.
Following this milestone, preparations will commence for the implementing rules and regulations (IRR) and the appointment of individuals to oversee the operations of the Maharlika Investment Corp. (MIC), as outlined by Diokno.
The successful transmission of at least P75 billion to the fund is crucial to achieve full operationalization by the end of the year.
This initial capitalization will be sourced from the Land Bank of the Philippines (P50 billion), the Development Bank of the Philippines (P25 billion), and the dividends of the Bangko Sentral ng Pilipinas.
National Treasurer Rosalia de Leon emphasized the government’s proactive approach in securing resources for the MIF.
De Leon stated that the legislature has been provided with the necessary ingredients, including the Santiago Principles, good governance, and transparency, to maximize the fund’s potential for attracting investments.
De Leon underscored the fund’s priority of investing in government infrastructure and other developmental projects that yield the highest returns.
These investments aim to generate a developmental impact by reducing the cost of living and basic commodities.
Moreover, they will incorporate considerations of environmental, social, and governance factors, and sustainable practices.
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