Economic managers urge swift passage of Maharlika bill

Published December 9, 2022, 2:30 PM

by Chino S. Leyco

The government’s economic managers have urged for the swift passage of the proposed sovereign wealth fund bill, noting it will help usher in the country’s inclusive and sustainable growth.

In a joint statement, the Department of Finance (DOF), Department of Budget and Management, National Economic and Development Authority and Bangko Sentral ng Pilipinas threw their support behind the Maharlika Wealth Fund.

“We, the Economic Managers of the Marcos Jr Administration, strongly support the creation of the Maharlika Wealth Fund as a vehicle to move forward the Agenda for Prosperity and achieve the economic goals of the administration,” Finance Secretary Benjamin E. Diokno said.

He said the establishment of a Sovereign Wealth Fund is a tried and tested investment vehicle that has been used by governments in both first world and developing countries to achieve their economic objectives.

Most recently, the model of the Indonesia Investment Authority has been a successful model of a sovereign wealth fund that was used to fund the country’s big ticket infrastructure projects even amidst the Covid-19 pandemic.

For Singapore, the investment gains from GIC, the central bank and state investor Temasek Holdings Pte have been the biggest contributors to the national budget since 2018.

“Without a doubt, the creation of the MWF will help us achieve our Agenda for Prosperity and the objectives for inclusive and sustainable economic growth we have outlined in our Medium Term Fiscal Framework, 8-Point Socioeconomic Agenda and in the Philippine Development Plan 2023-2028,” Diokno said.

“Direct benefits of the MWF include increased investments in and funding of big ticket infrastructure projects, high-return green and blue projects, and countryside development, including agriculture,” he added.

Diokno also cited the Fund’s intergenerational benefits, including increased access of future generations to income from investments, such as potential earnings from extracted natural resources such as in mining.

“In the near and medium term, a Sovereign Wealth Fund will enhance our fiscal space and reduce fiscal pressures as the fund pursue public infrastructure projects,” the DOF chief said.

Diokno, meanwhile, assured that Fund will be professionally managed as there will be efficient use and management of these investible public funds.

“They will be able to ensure the availability of an alternative high return investment platform, obtain the best absolute return for the funds, find additional sources of liquidity as the need arises, and perform better risk management, given additional layers of checks and balances in the use of investible funds,” Diokno said.

Ultimately, Diokno said this will redound to growth and help us achieve our economic transformation towards inclusivity and sustainability.

“Given all these, we urge the immediate enactment of the bill creating the Maharlika Investments Corp,” Diokno said. “Let us not delay economic progress. Let us not deprive our people of this opportunity for prosperity.”