Maharlika bill to provide new funding stream amid global slowdown

By Filane Mikee Cervantes

July 17, 2023, 9:41 pm

<p>Camarines Sur Rep. Luis Raymund Villafuerte <em>(File photo)</em></p>

Camarines Sur Rep. Luis Raymund Villafuerte (File photo)

MANILA – A lawmaker on Monday said the anticipated enactment into law of the Maharlika Investment Fund (MIF) bill is timely as global economic growth is expected to dip to around 2.8 percent in 2023.

Camarines Sur 2nd District Rep. Luis Raymund Villafuerte said in a statement that the proposed MIF would provide a new funding stream for investments and serve as a new growth stimulant in the face of a likely pronounced global economic slowdown, which the International Monetary Fund projected to slow from 3.4 percent last year to 2.8 percent this year.

Villafuerte said the bill, which is expected to be signed into law by President Ferdinand Marcos Jr. this week, would also be appropriate as the Fitch Ratings recently affirmed the Philippines' credit rating of “BBB” and upgraded its credit outlook from “negative” to “stable”.

“With its signing into law this week by the President, the MIF will clear the way for an alternative, potentially huge source of investment funds that would enable the national government to spend much bigger on public infrastructure and its other big-ticket programs to shore up our President’s ‘Agenda for Peace and Prosperity,” said Villafuerte.

“The establishment of the MIF, which our economic managers expect to be up and running before 2023 is over, is timely at this time when the Philippines has secured a higher investment grade status even as the world economy is going through a rough patch that experts fear could slash global output to near recessionary levels,” he added.

Villafuerte said the MIF will serve as a growth driver for the domestic economy by attracting private investments despite external headwinds that heighten global economic and financial uncertainties and threaten the Marcos administration’s near- and medium-term agenda for inclusive and sustainable development.

“Amid the not-so-favorable economic conditions worldwide, international investors are likely looking at putting their money in big-ticket projects like those being envisioned in the MIF and they might be keen on investing in this would-be Fund, especially with the recent rating upgrade of the Philippines," Villafuerte said.

He said with the MIF becoming a new investment fund source for high-impact, economically-viable programs and projects, the Marcos administration would be able to pursue its agenda to "sustain the robust economic growth path post-pandemic, create jobs and attack poverty, and keep the Philippines on its AmBisyon Natin 2040 path of becoming a prosperous middle-class society in less than two decades.”

The MIF bill seeks to establish a sovereign wealth fund that will be used to invest in a wide range of assets.

It will establish the Maharlika Investment Corporation that will act 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)." (PNA)