DAVAO CITY –— President Ferdinand Marcos Jr. on Tuesday morning, July 18, signed into law Republic Act 11954 or the Maharlika Investment Fund (MIF), the Philippines’ first-ever sovereign wealth fund.
The signing ceremony was held at the Kalayaan Hall of Malacañan Palace in Manila with the senators, congressmen behind the bill standing as witnesses.
The MIF is the Philippines’ first-ever sovereign wealth fund that will optimize national funds by generating returns to support the Marcos’ PBBM 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.
After signing the law, Marcos in his speech emphasized “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.”
The law, according to Marcos, will greatly help the country, especially in its infrastructure and economic development during the post pandemic recovery.
The Maharlika fund, will mean that the government will dedicate P250-billion ““We now have an available fund that will provide us the seed money for investments and to attract other foreign investments and for us to be able to participate in those operations, in those investments without additional borrowings,” Marcos added.
Under RA 11954 , the MIF will be used to invest 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 that contribute to the attainment of sustainable development.
Under the law, the government will establish Maharlika Investment Corp. (MIC) to serve as the “Sole vehicle for the purpose of mobilizing and utilizing the MIF for investments in transactions in order to generate optimal returns on investments (ROIs).”
The law prohibits government agencies and GOCCs that provide for social security and public health insurance to contribute to and invest in the Fund.
These include the Social Security System, Government Service Insurance System, Philippine Health Insurance Corporation, Home Development Mutual Fund, Overseas Workers Welfare Administration, and Philippine Veterans Affairs Office pension fund.
The Department of Finance has earlier explained that the fund will 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.
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.
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 DOF claimed.
