Philippines ready to consult Saudi businesses on Maharlika fund

MANILA, Philippines — The Philippines is open to consulting Saudi businesses on the structure of wealth funds, President Marcos said days after Malacañang suspended the implementation of the Maharlika Investment Fund to ensure that it would achieve its purpose.  

Maharlika, the Philippines’ first sovereign wealth fund, was mentioned during Marcos’ bilateral meeting with Saudi Crown Prince and Prime Minister Mohammed Bin Salman in Riyadh last Friday.

According to Presidential Communications Secretary Cheloy Garafil, the Crown Prince conveyed his interest to enhance trade and investment relations with the Philippines, and expressed “keen interest” in the Maharlika Investment Fund and other business-to-business engagements.

“The President responded by saying that the Philippines is willing to meet with Saudi businesses to learn how the Saudi sovereign wealth funds are structured so that the private sector can participate in the Maharlika Investment Fund,” Garafil said in a statement issued yesterday.

Republic Act 11954, the law creating the controversial Maharlika fund, was enacted last July 18. Under the law, the Maharlika Investment Corporation (MIC) will be created to act as the sole vehicle for mobilizing and using the investment fund.

The implementing rules and regulations of the Maharlika law were issued last Aug. 28. 

Officials have claimed that the investment fund would fast-track the implementation of key infrastructure projects and encourage investments in vital sectors. But the measure has drawn flak among some lawmakers and members of academe who believe that the wealth fund poses serious risks to the economy and the government.

Critics of the wealth fund have questioned the legality of the Maharlika law before the Supreme Court.

In a memorandum issued on Oct. 12, Executive Secretary Lucas Bersamin, upon the directive of Marcos, ordered the national treasurer to suspend the IRR of the Maharlika Investment Fund law.

Explaining its decision, Malacañang said the President wanted to study the IRR carefully to ensure that the objective of the investment fund would be realized and that safeguards are in place “for transparency and accountability.”

Before leaving for Saudi Arabia last Thursday, Marcos clarified that the organization of Maharlika is “proceeding apace” and is being enhanced to make it “as close to perfect and ideal as possible.” He added that the government is aiming to improve the organizational structure of the investment fund.

In an interview with reporters on the sidelines of the Association of Southeast Asian Nations-Gulf Cooperation Council Summit in Riyadh, Marcos said Maharlika has received positive response from Saudi Arabia and other Gulf countries.

“And it is not only Saudi Arabia, it is also other Gulf countries who have expressed an interest. And I am very encouraged and quite happy by the fact that the reaction that we got from our partners in Saudi Arabia and in other countries has been very, very encouraging,” Marcos said. 

“I’m confident that once we get it operationalized, once we are able to start talking in detail with not only the investment funds, but even private corporations and other governments as well, and that is precisely the role that we have envisioned for the sovereign fund, the Maharlika Fund. And that is the direction it has taken,” he added.

Saudi hiring more Filipinos

In the same bilateral meeting, Manila and Riyadh agreed to strengthen trade and investments, labor cooperation and tie-ups on renewable energy.

“To support and achieve Saudi’s steady growth rate in line with its Vision 2030, the Crown Prince signified his desire to hire more Filipino workers, whom he described as the best in the world,” Malacañang said in a statement. 

The Crown Prince was quoted by the Palace as saying that Saudi Arabia needs a large workforce. He cited the need for Saudi Arabia’s population to grow to at least 60 million from 20 million, of which, 14 million will comprise its workforce.

“As a response, Marcos expressed the Philippines’ willingness to assist Saudi Arabia in supplying skilled workers and professionals,” the statement read. 

There are about 760,000 Filipino workers in Saudi Arabia.

Prince Mohammed talked about possible partnerships in renewable energy. He said a Saudi firm that produces solar panels for the whole Middle East and Africa could also invest in the country. Saudi Arabia also expressed interest to partner with the Philippines in the energy sector, Malacañang said. 

“The President emphasized the country’s readiness to partner with Saudi Arabia to boost the Philippines’ clean energy supply,” the statement read. 

Marcos said the Philippines is willing to work with Saudi Arabia in ensuring food security by putting up agricultural projects for food production for the Middle Eastern country’s market.

Prince Mohammed also told Marcos that the payment of the benefits of Filipinos who worked for Saudi firms that went bankrupt is still under process and that the kingdom is working on the details.

The Saudi monarch also relayed his intention to visit the Philippines. Marcos welcomed the Crown Prince’s plan and formally invited him to visit the country.

Speaker lauds President Marcos

Speaker Martin Romualdez lauded President Marcos for the success of his visit to Saudi Arabia, securing investments and pledges, opening job opportunities for Filipinos and strengthening strategic ties with allies that can boost the nation’s prosperity.

“In light of these significant accomplishments, we commend President Marcos for his immensely successful visit to the Kingdom of Saudi Arabia,” the leader of the House of Representatives said.

Marcos’ two-day trip to Riyadh resulted in agreements signed between Saudi and Filipino firms with an estimated total value of $4.26 billion, expected to benefit around 300,000 Filipino workers and ignited keen interest of Saudi businesses in the Maharlika Investment Fund.

“His dedication, exceptional diplomatic finesse and vision for our nation’s future have resulted in tangible benefits for our country and our people, and we eagerly anticipate the positive impact these achievements will have on the Philippines’ growth and prosperity,” Romualdez added. 

These developments were the result of Marcos meeting with top Saudi business leaders on the sidelines of his participation in the 2023 ASEAN-Gulf Cooperation Council Summit, as well as bilateral meetings held with several GCC leaders. 

Romualdez noted that the developments arising from the President’s Saudi visit are a testament to the growing confidence in the Philippines as a prime destination for foreign capital, reflecting positively on the country’s economic climate and leadership.

Likewise, he said the gains achieved in Saudi are a testimony to Marcos’ vision for a more prosperous and interconnected global economy, one where the Philippines plays an integral role. — Delon Porcalla