The new version of the Maharlika Investment Fund pending approval in Congress dropped the Bangko Sentral ng Pilipinas’ other controversial sources of funding and is now eyeing an initial public offering (IPO), Albay 1st District Rep. Joey Salceda said on Friday.
In an interview with ANC, Salceda said he was tasked, along with some other lawmakers, “to rewrite and re-engineer” the MIF, which went through revisions and was approved by the House of Representatives during the Christmas break.
Salceda, the House resident economist and chair of the ways and means committee, said the latest revisions were done “because we want [the MIF] to succeed, and this is the one actually sold by the President in Davos.”
He explained that they decided to drop dividends from the Bangko Sentral ng Pilipinas (BSP) and state-run banks as among MIF fund sources.
“I am not sure whether I should be revealing this, but right after Christmas, we were commissioned — me and three others — to rewrite, essentially re-engineer the Maharlika Investment Fund,” Salceda told ANC.
“Basically, it’s very new. It’s basically securitization of about P44.3 billion in annual dividends, these are real surpluses…These are dividends by GOCCs, by their nature, they are already surpluses,” Salceda said.
According to Salceda, the P44.3 billion shall be protected in 20 years, and that amount, at a certain discount rate, can reach P765.96 billion.
“After that, there will be an IPO (Initial public offering) so it won’t be a GOCC anymore. It will be a listed company in the Philippine stock market,” Salceda said.
Salceda said the government will own less than 50 percent of the MIF, and that the MIF fund will “be more privately led and guided by the government.”
He justified the move — which came after a lot of revisions were already made before the House approved the MIF on the third and final reading last December 15 — as “essential” in shepherding the law to passage after a Senate review and getting the foreign investors on board.
President Ferdinand Marcos Jr., at a breakfast meeting with chief executive officers on the sidelines of the World Economic Forum in Davos Switzerland earlier this week, said the proposed sovereign fund is expected to drive infrastructure in energy and agriculture.
The House of Representatives on Dec. 16, 2022 approved the MIF bill, which had earned the support of 90 percent or 282 out of the 312 members of the chamber who were officially named as co-authors of the measure.
Speaker Martin G. Romualdez, the principal author of the bill, said the amendments introduced to the measure, especially the inclusion of more safeguards against possible abuse and fraud, “is our way of addressing the concerns of our people.”
“The proposed sovereign wealth fund will help President Ferdinand Marcos Jr. keep the country on the high-growth path. We want to assure the public that the management of the fund will follow best practices and the principles of transparency and accountability,” he said.
Another lawmaker, Surigao del Norte Rep. Robert Ace Barbers, on Friday backed Finance Secretary Benjamin Diokno’s plan to use earnings from the mining industry to jumpstart the Maharlika plan.
“I have said it many times before, our mining industry can save us and our country. In 10 years, Europe plans to have 50 percent of its vehicles run on full electricity. The raw materials needed for the electric car batteries are here in our country,” Barbers, chair of the House committee on dangerous drugs, said.
He said allowing the mining industry to proceed full scale will give the Philippines “the edge it badly needs.”
“We should not miss the bus again. Of course, this is not to say that all kinds of mining firms will be allowed to operate. Only those with proven track records in responsible mining practices will be given accreditation and the permits to do business,” Barbers said.
At the peak of the COVID-19 pandemic, Barbers was the first legislator who suggested to the former administration of President Rodrigo Duterte to reopen and revive mining and strengthen the tourism industry in order for the economy to recover, especially in the wake of the loans contracted for the purchase of COVID medicines and vaccines amounting to trillions of pesos.
In his previous calls, Barbers said that only the mining industry can save the economy post-pandemic, as it is the single biggest resource that the country has with the potential to earn trillions of dollars.
The country is the fourth richest in mineral resources, Barbers said, citing data.
“It is estimated that the total gold, copper, nickel and other mineral reserves are worth trillions of dollars, more than enough to pay off the country’s entire debt.”
“I fully agree and support Secretary Diokno in his proposal to use the earnings from the mining industry for the Maharlika fund. But I would even venture further. You see, where I come from, Surigao del Norte is not only the mining capital of the country, it is fast becoming a primary tourism destination,” Barbers pointed out.
“So I would propose that we also tap the huge earnings from the tourism industry. These two combined industries will no doubt rescue and lift us from this pit of debt that we are now in. I sure hope that the President will seriously consider this humble suggestion from this representation,” Barbers stressed.