Metro Manila (CNN Philippines, July 18) — President Ferdinand Marcos Jr. on Tuesday signed the controversial Maharlika Investment Fund (MIF) bill into law despite warnings from some economists and lawmakers that it may put the Philippine economy at risk.
In his speech following the signing of the MIF, Marcos described the fund as an “extremely important measure” and “bold step” as the government moves to strengthen the economy in a post-pandemic world.
Marcos’ approval came just seven months after the idea first floated at the House of Representatives, with his cousin House Speaker Martin Romualdez, presidential son and Senior Deputy Majority Leader Ilocos Norte Rep. Sandro Marcos, and four other solons filing the MIF bill.
The proposal has long secured the backing of the president. Marcos certified it as urgent both in the House of Representatives and the Senate.
The MIF is a sovereign wealth fund that the government targets to use to invest in foreign currencies, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects.
Under the law, the initial capital will come from the investible funds of the Land Bank of the Philippines, the Development Bank of the Philippines, declared dividends of the Bangko Sentral ng Pilipinas, and other sources.
READ: The proposed Maharlika Investment Fund: What you need to know
“For the first time in the history of the Philippines we now have a sovereign wealth fund designed to drive economic development,” Marcos said.
“Through the fund, we will leverage on a small fraction of the considerable but underutilized investable funds of government and stimulate the economy without the disadvantage of adding additional fiscal and debt burden,” he said.
Marcos said that while the Philippines has been embracing partnerships with the private sector and other governments for infrastructure and structural developments, he stressed that they “come under the category of borrowings.”
“We now have an available fund that will provide us the seed money for investments and to attract other investments and for us to be able to participate in those operations, in those investments without additional borrowings,” he said.
Marcos reiterated that the key to the success of the Maharlika fund is management, saying that the country has “the best economic managers both in government and in the private sector that we can count on to run this afund properly.”
This was why he decided to remove himself and the finance chief from the board so as to not taint it with political decisions, Marcos said.
“Because inevitably if you put me or the secretary of finance in a decision-making loop, those decisions will be colored by political considerations and that must not be the case,” he said.
“We have to look at any potential investment, we have to look at any potential operation of the fund in a cold calculating manner, that is the only way that it will succeed,” Marcos added.
The law has drawn flak from various sectors, with some groups calling it ill-timed as the country continues to grapple with rising inflation and record-high national debt.
READ: Maharlika fund ‘defective, poses serious risks’ to economy – UPSE faculty members
Senate Minority Leader Koko Pimentel also questions the constitutionality of the bill and has warned that Marcos will be signing an “illegal” document. This was after Senate President Juan Miguel Zubiri confirmed that some senators made corrections through their Viber group chat prior to Marcos’ signature.
