Marcos signs controversial Maharlika Investment Fund into law

President Ferdinand “Bongbong” Marcos Jr. has signed into law the controversial Maharlika Investment Fund (MIF) which he tags as an “extremely important measure” for the country’s economic development.

President Ferdinand ‘Bongbong’ Marcos Jr. (RTVM Screenshot)Marcos signed the MIF bill into law on Tuesday, July 18, a week before his second State of the Nation Address (SONA).

With the signing of the MIF, the Philippines now has an available fund that will provide the seed money for investments and to attract other investments.

The President said it also enables the Philippines to participate in crucial investments without additional borrowings.

“The MIF is a bold step towards our country’s meaningful economic transformation. Just as we are recovering from the adverse effects of the pandemic, we are now ready to enter a new age of sustainable progress, robust stability, and broad-based empowerment,” 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,” Marcos added.

He noted that the MIF is a “crucial undertaking” that will support the government’s overall goal of 6 and a half to 8 percent gross domestic product growth in the medium term.

“And through the fund we will accelerate the implementation of the 194 national economic and development authority board approved flagship infra projects,” he said.

As he signed the widely-criticized measure, the President has once again allayed fears surrounding the fund, stressing that all decisions that will be made for the fund will not be political.

“Let us make sure that the fund is well run. Let us make sure that these are professionals. Let us make sure that the decisions that are being made for the fund are not political decisions that are financial decisions because that is what the fund is. It is essentially a fund that we will continue to invest in, and the fund will fail if we do not make money on the fund. It’s that simple,” he said.

The chief executive stressed that there are many opportunities that “we cannot allow to slip by,” thus the MIF has to be put up.

He further said that the country now has a fund “which will itself make money” to increase the government’s capacity and capability to invest in all “extremely important projects” such as investments in agriculture, infrastructure, digitalization, strengthening of supply chains, and all of those necessary elements in the post-pandemic economy.

Marcos stressed that as long as the fund will be managed properly, it will not fail.

“I contend that we have some of the best economic managers both in government and in the private sector that we can count on to run this fund properly,” he said.

“I assure you that the fund will be managed by a highly competent personnel with a good track record and outstanding integrity,” he added.

READ MORE: Marcos assures Maharlika fund’s sound management; allays concerns

Tool for economic development

The MIF is a tool for economic development that will promote fiscal stability through strategic and profitable investments in key sectors.

It is envisioned to be invested in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, joint ventures, mergers and acquisitions, real estate and high-impact infrastructure projects, and projects that contribute to the attainment of sustainable development.

Unlike other government-owned or -controlled corporations (GOCCs), the MIF will be able to maximize government assets through its investments in projects that generate bigger returns.

The MIF is also seen to optimize national funds by generating returns to support the administration’s economic goals as set in the Medium-Term Fiscal Framework (MTFF), the 8-point Socioeconomic Agenda, and the Philippine Development Plan (PDP) 2023-2028.

The establishment of the MIF will provide the government with a long-term source of income that will support generations to come. It will also ease the burden on the national budget by providing additional funding for other priority projects of the government.

Expanding fiscal space without imposing new taxes

According to the Economic Team, the MIF will allow the government to execute and sustain high-impact and long-term economic development programs and projects by widening the country’s limited fiscal space without imposing new taxes or being too reliant on foreign and domestic loans.

“The Fund is an additional vehicle that would allow the government to tap surpluses that cannot be utilized under current legal frameworks. It will also be open to co-financing with foreign investors and multilateral institutions to facilitate financing of capital-intensive big-ticket infrastructure,” Finance Secretary Benjamin Diokno explained.

The Economic Team further believes that the MIF will sustain the country’s recent economic gains and accelerate socio-economic transformation by improving the country’s fiscal resilience. — Betheena Unite