Maharlika Wealth Fund, An Investment Vehicle and Economic Driver (2024)

The country’s Economic Team underscored the benefits of institutionalizing the proposed Maharlika Wealth Fund (MWF) during the 183rd Development Budget Coordination Committee (DBCC) meeting held on December 5, 2022 at the DOF Press Conference Room.

The meeting was led by Budget Secretary Amenah Pangandaman, with Finance Secretary Benjamin Diokno, Socioeconomic Planning Undersecretary Rosemarie Edillon, Bangko Sentral Monetary Board Member V. Bruce Tolentino, and GSIS President and General Manager Jose Arnulfo “Wick” Veloso.

The MWF is a sovereign wealth fund which will be used by the government to invest in a wide range of outlets such as foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects, among others.

On behalf of the Economic Team, Budget Secretary Pangandaman shared her optimism that the MWF will help the administration achieve its Agenda for Prosperity.

Meanwhile, Finance Chief Diokno noted that the country should have had the Sovereign Wealth Fund a long time ago to set aside funds for the future generations.

GSIS President and GM Veloso also believes that a number of key industries in the country can move forward upon investment in high capital expenditures through the MWF which will, in turn, improve employment, taxation, and economic activities. Moreover, Veloso allayed fears that the MWF would follow the same path as the 1Malaysia Development Berhad (1MdB) fund which had a single signatory. On the contrary, the MWF provides for checks and balances.

A total of Php 250 billion startup investment for the MWF will come from Government Financial Institutions (GFIs) such as the GSIS, SSS, Landbank of the Philippines, and Development Bank of the Philippines. This will be supplemented by annual contributions from the BSP, DOF, and other sources.

The Economic Team further assured the public that enough safeguards will be put in place to ensure accountability and transparency in managing the MWF. These include abiding by the Santiago Principles of the International Working Group of Sovereign Wealth Funds, and establishing a three-layer mechanism for checks and balances which feature internal audit, external audit, and finally, examination and audit by the Commission on Audit. Additionally, there will be an executive department reportorial requirement which will be implemented together with congressional oversight.

The MWF aims to ensure economic growth by generating consistent and stable investment returns with appropriate risk limits to preserve and enhance long-term value of the fund; obtaining the best absolute return and achievable financial gains on its investments; and satisfying the requirements of liquidity, safety/security, and yield in order to ensure profitability of the GFIs’ respective funds.

A House Bill establishing the MWF was filed on November 28, 2022 by Representatives Ferdinand Martin Romualdez, Manuel Jose Dalipe, Ferdinand Alexander Marcos, Stella Luz Quimbo, Yedda Marie Romualdez, and Jude Acidre.

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