Amid criticism of the proposed Maharlika Investment Fund, Finance Secretary Benjamin Diokno on Friday expressed optimism the MIF would “attract more investments” to the country.
During the Asia CEO Forum, the Finance chief pointed out that Indonesia’s sovereign wealth fund — the Indonesia Investment Authority — had grown to as much as $20 billion from seed money of $2 billion or about P100 billion.
He underscored that the initial funding for the MIF that would come from the investible resources of the Landbank of the Philippines (P50 billion), the Development Bank of the Philippines (P25 billion), and the dividends/profits of the Bangko Sentral ng Pilipinas would only be the “seed money.”
Diokno said the MIF would fund public roads, tollways, renewable energy, water works, telecommunications, and agriculture infrastructure projects.
“Creating the fund will entail higher returns both in the short term and the long term that will redound to inclusive and sustainable growth,” Diokno said.
“The fund is an additional vehicle that would allow the government to tap surpluses that cannot be utilized under current legal frameworks. It will also be open to co-financing with foreign investors and multilateral institutions to facilitate the financing of capital-intensive big-ticket infrastructure,” Diokno explained.
He also reiterated National Treasurer Rosalia de Leon’s statement during the Senate Committee on Banks, Financial Institutions and Currencies second hearing on the MIF bill that the economic team would eventually come up with a plan once the Maharlika Investment Fund Corporation was established.
The MIF bill that passed in the House provides for the creation of the Maharlika Investment Fund Corporation — which will oversee the sovereign wealth fund — in response to criticism that the MIF lacked a coordinated business plan.
Diokno acknowledged, however, that it was too soon to determine how much the sovereign wealth fund would grow if it were established.
“We don’t have any projection yet, but there’s much money floating around,” he said.
Diokno assured, however, that the MIF would be established with the highest accountability, fiscal responsibility, and good governance standards.
“The proposed fund will adhere to the Santiago Principles, which pertain to the generally accepted principles and practices to ensure the effective operation of sovereign wealth funds globally, and will be governed by the relevant investment and risk management guidelines,” the Finance chief said.