The establishment of the Maharlika Investment Fund (MIF) will prepare the Philippines to sustain and complete its development programs and projects as it aims to become an upper middle income country by 2025, an economic official said.
National Economic and Development Authority (NEDA) Undersecretary Rosemari Edillon said the country is preparing for its transition to becoming an upper middle income country by 2025, as outlined in the Philippine Development Plan (PDP) for 2023 to 2028. This transition, she said, will have significant implications for the country's fiscal situation and access to concessional loans, like the Official Development Assistance (ODA). “‘Pag naging upper middle income country po tayo, hindi na po tayo qualified—siguro may grace period na two years ‘yan… hindi na tayo qualified sa mga concessional loans (If we become an upper middle income country, we will no longer be qualified for concessional loans, perhaps it will have a two-year grace period),” Edillon said in a news forum in Quezon City that on Saturday, July 8. She explained that concessional loans offer low interest rates and extended grace periods to countries with below upper middle income status. Once the Philippines achieves its target status, Edillon said the country will have to rely on market rates for debt financing, which would be challenging for the government. The NEDA executive stressed that due to the impact of the Covid-19 pandemic, the country was unable to raise its credit rating to achieve the desired creditworthiness, which could have improved debt financing conditions. To address this challenge, Edillon further said, the government is exploring innovative ways of financing income-generating programs and attracting investments, one of which is the establishment of the MIF. Edillon said the MIF aims to attract equity financing rather than debt financing, which allows investors to become partners in projects, sharing in the risks and rewards of the venture, such as the flagship infrastructure programs of the Marcos administration. Last week, [Malacañang has received the bill](https://mb.com.ph/2023/7/5/palace-receives-maharlika-bill-for-marcos-signature) for President Ferdinand "Bongbong" Marcos Jr.'s signature. Once enacted, the MIF will provide an additional avenue for development financing, particularly for projects that are considered risky but strategically important and have the potential for long-term returns, Edillon said.