The government will ensure that the planned first-ever sovereign wealth fund will suit the needs of the country, President Ferdinand Marcos Jr. said in an interview in Davos, Switzerland before arriving in Manila yesterday afternoon.
He said the proposed Maharlika Investment Fund (MIF) is currently under review by Congress to make sure that its establishment would reap significant benefits for the country.
“We have to design it very specifically to the Philippine condition. And that’s what the legislators are trying to do now – to make sure it will be suitable for us and it will be a good thing for us. So that’s the process that we’re undergoing now,” Mr. Marcos said.
The President made ‘Maharlika…a soft launch of the MIF during the Philippines’ Country Strategy Dialogue at the World Economic Forum (WEF) in Davos.
The proposal to create the MIF for the Philippines gained support from WEF participants, as Mr. Marcos noted that the fund would be used to diversify the country’s financial portfolio.
“I took the opportunity as well to consult with our friends and partners in Davos on the sovereign wealth fund as a means for us to diversify our income sources, and to generate various welfare effects to the Filipino people, while recognizing that this is a collaborative work with experts and our lawmakers so that its final form is what we intend it to be,” he said.
“And that discussion about the sovereign wealth fund, the Maharlika Fund, was an interactive one wherein not only did we present our ideas on what the fund should look like but we asked them what do you think would be most advantageous for the Philippines so as to allow the potential investments that you are thinking about bringing into the Philippines and how the fund would be best designed to service that investment,” the President added.
He said there was even a suggestion from a business leader to raise money for the proposed wealth fund through an initial public offering (IPO), a process that allows a private corporation to sell its shares of stock to the public for the first time.
House Bill (HB) 6608 or the proposed MIF Act seeks the establishment of an independent fund that adheres to the principles of good governance, transparency, and accountability.
HB 6608, certified by Marcos as urgent, was approved by the House of Representatives on final reading on Dec. 15, 2022, and was transmitted to the Senate on Dec. 19, 2022.
The new version of the Maharlika Investment Fund pending approval in Congress already dropped the Bangko Sentral ng Pilipinas and other state-run banks as fund sources.
Congress is also now eyeing an 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.
“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 fund will “be more privately led and guided by the government.”
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,” Romualdez said.