THE Committee on Banks, Financial Institutions and Currencies, chaired by Senator Mark Villar, opened the public hearing on twin measures seeking to establish a sovereign wealth fund Wednesday, February 1, 2023.
The Maharlika Investment Fund (MIF) Bill filed by Sen. Villar is one of the priority measures of President Marcos Jr.’s administration to ensure that the country will attain economic transformation, growth, and sustainability.
“The bill seeks to create the Maharlika Investment Fund, which will be used to invest in programs and projects which may help generate income and in attaining the government’s economic plans,” Villar was quoted as saying during the opening of the hearing.
The MIF is a sovereign wealth fund that the government will use to invest in various sectors and instruments like foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial estate, and infrastructure projects to generate income that can be used for priority programs of the country.
Finance Secretary Benjamin Diokno led the country’s top economic managers in answering questions regarding the proposed creation of MIF, a sovereign investment fund that aims to promote economic growth by accruing profits from government assets and investible reserves.
On Wednesday, the Senate opened the first public hearing on MIF, which discussed the composition of the MIF’s 15-member board of directors whose chairperson, according to the current versions of the bill from both the Senate and House of Representatives, is the secretary of the Department of Finance (DOF).
Aside from Diokno, Department of Budget and Management (DBM) Sec. Amenah Pangandaman, Bangko Sentral ng Pilipinas (BSP) Gov. Felipe Medalla, and National Economic and Development Authority (NEDA) Chief Arsenio Balisacan also briefed the committee on the MIF priority programs.
Sen. Sherwin Gatchalian noted that those investors who would put their money in the sovereign wealth fund seem to “enjoy too many tax exemptions” compared to those who avail of other mutual funds.
Sen. Francis Chiz Escudero asked a resource person to shed light on the “purpose and vision” of the MIF, which Diokno and his group assured will really stimulate the growth and stability of the Philippine economy.
Escudero said it is important that the economic team help provide answers to the perceived “gaps and loopholes” in the current version of the proposed bills by submitting their positions and recommendations.
Escudero earlier asked a clarificatory position about the need for a sovereign investment fund: where the investible funds will be sourced from; the rate of the return of investments of those who will contribute to the MIF; what kind of projects will be invested in; where the income of the MIF will be spending at; and the effect of a projected global recession on the MIF as well as the composition of its 15-member board of Directors, and possible tax exemptions among others.