Economy-boosting Maharlika fund to be closely monitored – Villar

MANILA, Philippines — The proposed Maharlika Investment Fund (MIF) will help ensure the country’s sustained and long-term growth through investments in big-ticket infrastructure and green projects, and will be closely monitored using global accounting and auditing standards, Sen. Mark Villar said yesterday.

Villar, chairman of the Senate committee on banks and financials institutions, sponsored yesterday his panel’s report on Senate Bill 2020 or the proposed MIF Act, which he described as a “timely measure that should be given utmost attention and urgency by this Congress.”

He said the Philippine economy is now at a critical period of recovery and growth, and before the pandemic, the country was heading toward becoming one of the fastest rising economies in the region.

“With high inflation and slower economic growth threatening both developed and emerging economies globally, we have to train our eyes on the future. As policymakers, we have to take bold steps towards exploring measures that will contribute to high growth that cannot be easily reversed by external headwinds and future crises,” Villar said.

“As the Philippines’ first-ever sovereign wealth fund, it is designed to catalyze economic development by mobilizing government financial assets that are otherwise limited in use by current legal frameworks,” he said.

He added, “Having our own sovereign wealth fund will grant us access to the world’s sovereign wealth fund community, which is abundant in opportunities for co-financing and knowledge transfer.”

He said government was able to bring infrastructure development back to the fore after years of underinvestment.

The country’s fiscal health was stronger than ever, with a debt-to-GDP ratio reaching a record-low 39.6 percent in 2019 while reforms to improve the tax system and ease of doing business allowed the country to build a business environment conducive to long-term growth.

He said strong macroeconomic fundamentals enabled the government to provide support to those who needed it most during the pandemic without significantly compromising fiscal health.

“But the journey towards our long-term goals of reducing poverty and raising the quality of life for all Filipinos may take much longer if we do not put in the right investments that will give the Philippine economy the momentum to zoom forward,” the senator said.

The fund’s dual objectives of optimizing financial returns and accelerating the development of infrastructure and other priority projects in key sectors will be an important instrument to generate consistent and stable investment returns to advance the Philippines’ long-term development goals, he said.

The MIF will support the administration’s economic goals set in the Medium-Term Fiscal Framework, the 8-point Socioeconomic Agenda and the Philippine Development Plan 2023-2028 in a way that will ease the pressure on the government’s fiscal space.

The MIF will quicken the implementation of NEDA-endorsed infrastructure projects, particularly green and blue projects, countryside development and other employment-generating projects.

Some of the big-ticket priority projects may be undertaken by Maharlika Investment Corp. through co-investments with global financial institutions and multilateral partners, opening another corridor for foreign direct investments.

This is especially significant considering the Philippines will soon lose its access to official development assistance as the country graduates to upper middle-income status, he said.