2023 July 18
MIF ACT. President Ferdinand R. Marcos Jr. shows the signed copy of Republic Act 11954 or the Maharlika Investment Fund Act of 2023, at the Kalayaan Hall of Malacañan Palace in Manila on Tuesday (July 18, 2023). The establishment of the MIF will provide the government with a long-term source of income, as well as ease the burden on the national budget by providing additional funding for other priority projects of the government.
MANILA – The Department of Finance (DOF) said the Maharlika Investment Fund (MIF) would help catalyze economic development and accelerate the country’s growth by optimizing the use of government financial assets.
In a statement on Tuesday, the DOF said the passage of the Philippines’ first sovereign wealth fund demonstrates the administration’s commitment to pursuing its goals for economic growth.
President Ferdinand R. Marcos Jr. signed into law Republic Act 11954, otherwise known as the MIF Act of 2023, establishing the Philippines’ first sovereign wealth fund.
“Congress passed a game-changing measure – the Philippines’ first-ever sovereign investment fund – that could accelerate infrastructure development in the country, create a lot of high-quality jobs, attract more foreign investors, and propel the country towards higher growth,” Finance Secretary Benjamin Diokno said.
The MIF is expected to widen fiscal space, ease the burden on local funds, and reduce reliance on official development assistance in funding big-ticket projects, such as those specified in the recently approved Infrastructure Flagship Project (IFP) list.
Within the MIF will be sub-funds classified according to objectives – one with a long-term horizon focused on investing in profitable infrastructure, and another sub-fund with a short- to medium-term horizon focused on investing in capital market assets, such as fixed-income securities and stocks.
The Maharlika Investment Corp. (MIC) will be created to serve as the investment body responsible for the overall governance and management of the Fund and is expected to be fully operational by end-2024.
It will identify financially and commercially viable infrastructure projects to invest in and will formulate investment strategies covering emerging megatrends, such as environment, social and governance, digitalization, and health care.
The MIC will be governed by a Board of Directors with nine members chaired by the Secretary of Finance.
Other members are the chief executive officer (CEO) of the MIC; the president and CEO of the Land Bank of the Philippines; the president and CEO of the Development Bank of the Philippines; two regular directors; and three independent directors from the private sector.
Within the MIC is an Advisory Body composed of the secretary of the Department of Budget and Management, the secretary of the National Economic and Development Authority, and the Bureau of the Treasury that will assist the Board of Directors in the formulation of the general policies related to investment and risk management.
The DOF said the MIF Act’s implementing rules and regulations are being crafted and would be finalized by September.
Anna Leah Gonzales (PNA)