Maharlika fund can ‘quadruple’ through outside investors — national treasurer

Metro Manila (CNN Philippines, February 1) — National Treasurer Rosalia de Leon is confident the ₱75-billion initial capital of the controversial Maharlika fund could balloon and unburden the Philippines from its mounting debt.

During a hearing on Wednesday, De Leon said that the Indonesia Investment Authority, the country’s sovereign wealth fund, secured $20 billion in commitments and pledges from global investors and other sovereign wealth funds after injecting $5 billion in capital.

Sen. Sherwin Gatchalian then asked the official if it would be possible for the Philippines’ proposed investment trust to also “quadruple” its capital if it could entice others to co-invest.

“Yes, sir…in commitments,” De Leon said.

The Maharlika Investment Corp., which will manage the Maharlika Investment Fund (MIF), will get its initial capital from LandBank (₱50 billion) and the Development Bank of the Philippines (₱25 billion).

De Leon also said the MIF received “a good reception” abroad.

“But they’d like to know more. They want to see how they, as investors, could participate in the fund,” she added.

“We already have that interest that we were able to stimulate,” De Leon said.

However, Sen. Risa Hontiveros noted that, unlike Indonesia, the Philippines does not have a portfolio of infrastructure and mining investment projects that could attract foreign investors.

Hontiveros also questioned the Maharlika fund’s potential to reduce the country’s debt-to-gross domestic product (GDP) ratio, which rose to 63.7% as of end-September 2022.

De Leon said they do not have a firm projection yet, but stressed the establishment of the Maharlika fund would allow the government to do away with borrowing activities when financing infrastructure projects.

“Some of these infrastructure projects, development projects that we have can be already funded by these co-investments by the fund, and global investors who will be participating in the MIF,” she said.

“We have these contributions, kahit ₱75 billion siya [even though it’s just ₱75 billion], then we can co-invest with other investors in these kinds of projects. We will also benefit from the transfer of technologies and knowledge,” De Leon said.