Philippine President Ferdinand Marcos Jr. is pushing for the immediate enactment of a bill in the Senate that will set up a sovereign wealth fund that proponents say will shield the country from slowing economic growth and rising borrowing costs.
“There arises an urgent need for a sustainable national investment fund,” Marcos said in a statement on Wednesday. “This fund will serve as a new growth catalyst, accelerating the execution of strategic and impactful large-scale infrastructure projects that will stimulate economic activity and foster development,” he said in the statement issued by his communications office.
Philippines Moves Closer to Wealth Fund Plan With House Approval
The House of Representatives last December approved the bill creating the controversial Maharlika Investment Fund, just over two weeks after the measure, which aims to tap and securitize dividends from state-owned companies, was filed. Once the Senate passes the bill, it will reconcile the measure with the House version before it can be signed by Marcos.
Some key provisions in the bill that’s undergoing debates in the Senate include:
- setting up a corporate body to be called Maharlika Investment Corporation which will mobilize the wealth fund for investments
- providing for an authorized capital stock of 500 billion pesos for the corporation, divided into 5 billion shares
- prescribing an initial 125 billion pesos worth of common stocks to be subscribed by the government, with 50 billion pesos coming from Land Bank of the Philippines and 25 billion pesos from the Development Bank of the Philippines
- specifying central bank dividends, gaming agency income and proceeds from privatization of government assets as other sources of funding
- allowing the corporation to issue bonds and securities
Finance Secretary Benjamin Diokno said this is the “best possible time” to establish the sovereign wealth fund, citing the state agencies’ sufficient investible funds and the opportunity to make use of “robust” financial instruments to sustain the country’s economic growth momentum.
“This is an opportune time to take advantage of the ample liquidity of our government financial institutions, which have investible funds,” Diokno said in a mobile-phone message to reporters.
--With assistance from Andreo Calonzo.
(Adds key provisions of the bill in fourth paragraph.)
