MANILA, Philippines — The Development Bank of the Philippines (DBP) has remitted its P25-billion contribution to the Maharlika Investment Fund (MIF), ahead of the formal establishment of the corporation that will manage the country’s first sovereign wealth fund.
In a statement over the weekend, DBP said it has formally turned over the amount to the Bureau of the Treasury.
This came after nearly three weeks since the issuance of the law’s implementing rules and regulations (IRR). The P25 billion represents DBP’s share in the initial seed capital for the MIF.
A day earlier, the Land Bank of the Philippines also remitted its share amounting to P50-billion. The DBP and the Landbank are the two largest state-owned financial institutions in the country.
While the Maharlika Investment Corp. (MIC) has yet to be established, the Treasury will serve as an escrow until the corporation is fully organized.
DBP president and CEO Michael de Jesus said the bank is one with the government in ensuring the immediate establishment of the MIC to reshape and redefine the country’s economic landscape.
DBP expects the MIC to be properly and effectively managed through strong leadership and corporate governance.
De Jesus said the MIC should be able to optimize the use of the government’s financial assets to generate substantial returns and support infrastructure projects in order to promote efficient management of wealth and assets.
“DBP foresees that in the next four to five years, the country should be reaping the gains from both on the financial and developmental fronts as a result of the trailblazing activities of the MIC,” De Jesus said.
Finance Secretary Benjamin Diokno also expressed confidence that the MIF would be up and running by yearend, as scheduled.
“We are witnessing a growing interest for investments in the MIF from multilateral financial institutions and foreign investors,” Diokno said.
“With the regulatory requirements in place and after securing the seed capital from state-run institutions, we are confident that the fund will be operational by yearend,” he said.
The MIF has an authorized capital stock of P500 billion. Based on the law and its IRR, the LandBank and the national government are mandated to initially contribute P50 billion each and DBP, P25 billion.
The P50-billion government share would be sourced from central bank dividends, income share of the Philippine Amusement and Gaming Corp., proceeds from privatization of government assets and other sources such as royalties, special assessments for a period of five years.
Nominations to and applications for posts in the MIC remain open until Sept. 27.
The MIC will be the investment body responsible for the overall governance and management of the MIF. A board of directors with nine members will govern the MIC.
As finance chief, Diokno automatically gets designated as MIC chair. DBP’s De Jesus and Landbank president and CEO Lynette Ortiz each gets a seat on the board.
The six remaining posts are for the CEO as well as for two regular and three independent directors from the private sector.
The MIC is tasked to identify financially and commercially viable infrastructure projects to invest in and will formulate investment strategies covering emerging megatrends such as environment, social and governance, digitalization and health care.