The head of the state-run Development Bank of the Philippines (DBP) is pushing for the swift passage into law of the Maharlika Investment Fund Bill, which was recently approved on third and final reading in the House of Representatives.
DBP president and chief executive Emmanuel Herbosa said Thursday that he fully supports the establishment of the pioneering sovereign wealth fund (SWF), sharing the sentiments of business leaders and leading economists on the need to boost investments in high-growth sectors to sustain the country’s growth momentum.
This developed as Quezon Rep. David Suarez lauded the House leadership under Speaker Martin G. Romualdez for its unwavering push for the approval of the proposed MIF.
In lauding Romualdez’s leadership, Suarez also said the proposal to put up a sovereign wealth fund is expected to further speed up the economic train that the Marcos administration has started running.
Last week, the chamber approved on the third and final reading House Bill (HB) 6608 creating the MIF with an overwhelming vote of 279 lawmakers in favor of the measure, and only six voting against it and no abstentions.
President Ferdinand Marcos Jr. certified the measure as urgent.
Herbosa said it is imperative to broaden investments in critical areas such as food, water, green energy, agro-industrial ventures, telecommunications, public infrastructure, and road network tollways, which can offer better rates of return and greater socio-economic impact.
“From my personal standpoint, the creation of a SWF is a superb opportunity to address the dearth in sources of long-term capital which is integral to support these capital-intensive investments,” he said.
“As head of a government bank, the SWF is closely aligned with our operating principle of bolstering economic additionality through timely and meaningful support of critical industries and sectors,” he said.
The establishment of a sovereign wealth fund through the enactment of a law creating the MIF garnered the solid support of 90 percent of congressmen. It has undergone several refinements and has hurdled grueling and extensive interpellations by the opposition block in the lower house, Suarez added.
Herbosa said the introduction of additional safeguards in the proposed measure such as heavy scrutiny by the Commission on Audit apart from regular examinations by both an internal and external auditor has assuaged concerns of various sectors.
It also ensures that the fund will be adequately shielded from fraud, abuse, and undue political interference, he said.
Herbosa said the provision of sovereign guarantees for specific contributions adds another layer of confidence in the sustainability, reliability, and integrity of the SWF, especially in funding projects with long gestation periods.
It would also attract the private sector and even foreign funders that would ensure transparency and greater accountability in managing the fund, the DBP chief said.
“At this juncture it’s best that we allow the bill to take its proper course in the legislative mill as I believe this would lead to a solid and watertight law in view of the purification and purging process that it underwent,” Herbosa said.
Earlier, Economic Planning Secretary Arsenio Balisacan also batted for the early approval into law of the MIF bill because it will complement the strategies and hasten the attainment of goals set in the Philippine Development Plan 2023-2028.
During the #AskNEDA year-end media briefing, Balisacan said the Maharlika would be another source of funds that will support the government’s investment priorities.
“So we see the Maharlika as another vehicle for sources of funds for investments… just like PPP [Public-Private Partnership]. ODA [Official Development Assistance], and GA [General Appropriations]. So the more vehicles we have, the better….so that we can ramp up not only the infrastructure projects and even other priorities of the government,” Balisacan said.
When asked if the non-approval or delayed approval of the bill would not affect the PDP 2023-2028, Balisacan said “the earlier the better…Because just like I said, what it does is it complements, it enhances the available vehicles that we already have…So that is the whole idea.”
Suarez said the proposed measure has gone through exhaustive review and rigorous plenary discussions and “fortified with safeguards and safety nets to ensure that fund managers will not be able to dip their hands into the fund’s investments.”
“The approval of the bill went through congressional surgery. We made sure that not only is it compliant to local laws but congruent to international standards as well,” he said.
“I am pleased that even members of the House of Representatives who were initially opposing the bill are now co-authors of the final version that was approved by the lower house. That is proof that the measure was well-thought of and sufficiently deliberated upon,” the Quezon solon said.
The public should not be misled into believing that the proposed MIF will be disadvantageous to the public and would benefit only the administration and its allies, Suarez said.
“Our people need more information about the MIF so that they can see that the benefits outweigh the unwarranted fear. This is why I am appealing to all Filipinos to support the measure. There are 79 sovereign investment funds from other countries, of which 78 were successful. It is an issue of management and with so many brilliant minds in the Philippines, the Maharlika fund will be successful,” he said.