NIGHT OWL
The proposed Maharlika Investment Fund (MIF), which was already approved by both houses of Congress, is set to be the country’s first-ever sovereign investment fund that is expected to generate income for the government and help promote economic development.
The fund will help boost the Build Better More program of President Ferdinand R. Marcos Jr.’s administration as it will be an additional financing mechanism for capital-intensive infrastructure projects, among others. It will also be used to invest in key sectors, such as agriculture and energy.
Senator Mark A. Villar, chairperson of the Senate Committee on Banks, Financial Institutions & Currencies, and principal author and sponsor of the Senate’s version of the Maharlika bill, said that the measure will address the need of the State to preserve and use government financial assets to generate optimal returns to support the infrastructure development agenda of the government, as well as to create jobs, promote investments, foster technological transformation, strengthen connectivity, achieve energy, water and food security, and support the government’s poverty reduction efforts.
He added that they carefully studied the bill and ensured that necessary safeguards were put in place to ensure that it will benefit the Filipino people.
The proposed measure will create the Maharlika Investment Corporation (MIC) that must establish a diversified portfolio of investments in the local and global financial markets and in other assets that promote the objectives of the Fund. It will manage and invest the initial and future contributions to the fund, and must implement international best practices in investing and managing assets in accordance with the Santiago Principles and other internationally-accepted standards and principles of transparency and accountability.
Senator Villar explained that the MIF would provide a diversified source of revenue for the government outside of taxes and other sources, and as such, the government can increase spending on essential infrastructure projects that are necessary to promote economic growth and development.
More infrastructure projects mean more job opportunities — Maharlika is projected to generate about 350,000 jobs in the country. Better infrastructure leads to economic growth as it increases the efficiency in transportation, communication, and other systems. Ultimately, infrastructure development and job creation can lead to poverty reduction.
Since the MIF could accumulate capital over time, it will provide a long-term source of investment capital for the government. It can also help provide funding for long-term projects that promote sustainable development in the country.
Moreover, Maharlika will contribute to economic and fiscal sustainability as it will provide a stable source of funding for the government and reduce its reliance on short-term borrowing and improve the country’s credit worthiness.
It is also worthy to note that the MIF could facilitate intergenerational wealth transfer as the investments will result in the creation of important national infrastructure projects that future generations can enjoy and benefit.