BEYOND BUDGET
Assalamu alaikum wa Rahmatullahi wa Barakatuh.
The new year is about new beginnings. I am happy to note that the Maharlika Investment Corporation (MIC), which shall govern the Maharlika Investment Fund (MIF), has hit the ground running with its inaugural meeting on Jan. 3, 2024, to fully operationalize the Fund.
MIC President and Chief Executive Officer (PCEO) Jose Rafael Consing Jr. described the meeting as a “sowing of a seed, destined to grow into a mighty sequoia of multigenerational commercial and economic value for the Philippines,” to which I wholeheartedly agree.
PCEO Consing likewise said that, “Our endeavors must nourish every corner of the nation. We aim to not be just stewards of wealth, but architects of inclusive growth, bridging the gap between economic promise and tangible prosperity for all Filipinos.”
These reassuring statements truly reflect and cement the commitment of the administration of President Ferdinand R. Marcos, Jr. (PBBM) to promote and establish inclusive growth where no Filipino is left behind.
I am then deeply excited as our country embarks on its first sovereign wealth fund. I believe it is an appropriate and vital step toward realizing the nation's growth potential, at a time when rising interest rates are weighing down the outlook for the world economy and the government's ability to implement fiscal stimulus is being curtailed by pandemic-related increases in debt.
The MIF, created by virtue of Republic Act No. 11954, directs a portion of underutilized government financial institutions' investable funds toward projects with favorable opportunities for domestic and foreign capital participation. This is a crucial addition to our economic liberalization laws. The MIF is intended to fast-track the implementation of 197 high-impact infrastructure flagship projects valued at about P8.7 trillion while widening the fiscal space. It will support our 6.5 percent to eight percent GDP growth target in the medium term. Thus, I trust that its creation will stimulate the economy and ease the country’s fiscal and debt burdens.
As PBBM described during the ceremonial signing of the MIF Act in July 2023, it is "a bold step towards our country’s meaningful economic transformation," as our underutilized funds will now work for us. In the same event, PBBM emphasized the importance of the people who will handle the fund, free from political intervention. He highlighted, "Let us make sure that the fund is well-run. Let us make sure that these are professionals."
Indeed, the President made excellent choices for the composition of MIC Board members, headed by Finance Secretary Benjamin Diokno as ex-officio chairperson and MIC PCEO Consing, whom he appointed on Nov. 13, 2023, as vice chairperson. They are backed by Landbank PCEO Ma. Lynette Ortiz; Development Bank of the Philippines PCEO Michael De Jesus; and MIC Directors Vicky Tan, Andrew Gan, German Lichauco II, and Roman Felipe Reyes. I believe they will all do well, as they have vast experience and expertise in the fields of investment and risk management, economics, banking, and finance.
Further, I am happy to share that as the Budget Secretary, I am part of the advisory body which shall assist the Board of Directors in the formulation of general policies related to investment and risk management. Other members of the body are the National Treasurer and the Socioeconomic Planning Secretary.
At the inaugural meeting, the MIC Board nominated chairpersons for their committees and created additional committees necessary for the effective and efficient performance of their functions. The MIC's proposed capitalization scheme worth ₱125 billion was also approved by the Board.
Moreover, PCEO Consing presented the following investment themes: infrastructure; oil, gas, and power; agroforestry; industrial urbanization; mineral processing; tourism; transportation; and aerospace and aviation. One such theme of particular interest is that of the power industry. In a statement last Jan. 5, 2024, House Speaker Martin Romualdez noted that the power outages in Iloilo City and Western Visayas since Jan. 2, 2024 highlighted critical issues in power infrastructure, impacting businesses, industries, and the daily lives of our kababayans in the area.
This challenge, Speaker Romualdez emphasized, calls for decisive action and collaboration among agencies. Thus, he proposed, among others, that the MIC consider investing in the National Grid Corporation of the Philippines (NGCP), underscoring that "this strategic investment could provide essential capital for infrastructure upgrades and help in lowering the cost of electricity for consumers. Such involvement could lead to improved efficiency, economic growth, enhanced energy security, support for renewable energy integration, and increased accountability in NGCP’s operations." I fully support the Speaker's call, for the MIC could contribute to a reliable, efficient, and sustainable energy infrastructure.
Going back, the MIC also intends to invest in infrastructure. As you know, the government is ramping up its infrastructure development dubbed as the Build-Better-More Program to enhance mobility and connectivity in the country. Hence, I am certain that a great deal of investment opportunities await the MIC in this sector.
However, if I may iterate, the investment themes previously enumerated are still subject to further scrutiny, shortlisting, financial modeling, due diligence by the Investment Management Group, and endorsement by the Investment Committee. I nonetheless trust that the Board desires nothing but to propel our economy forward in carrying out its mandate.
Beyond budget, the operationalization of the MIF aims to widen government fiscal space and ease financing for its infrastructure projects, among others. It carries the dreams and aspirations of the Filipino people. Thus, rest assured that the PBBM administration will ensure the fund's integrity and translate its gains into tangible changes. Together, let us support the MIC and MIF to achieve a Bagong Pilipinas for ourselves and future generations.
(Amenah F. Pangandaman is the current Secretary of the Department of Budget and Management.)