Maharlika restricted to projects that return 10%

PROJECTS funded by the Maharlika Investment Fund (MIF) will be screened out if they do not deliver a return of at least 10%, the level prescribed by the government’s economic planners, Finance Secretary Benjamin E. Diokno said.

“We are going to make sure that every project that will be funded will have a rate of return of at least 10%. That is the National Economic and Development Authority (NEDA) cutoff. Many projects even have a 25% return of investment,” he said in a chat with reporters on Friday.

Mr. Diokno said the bill creating the country’s first sovereign wealth fund will likely be signed by President Ferdinand R. Marcos, Jr. two weeks from now. 

Last month, the Senate adopted the House of Representatives’ version of the bill. Revisions have also been introduced through discussions within the Senate majority bloc after the bill’s approval.

The implementing rules and regulations of the bill are also currently being finalized, Mr. Diokno said.

“The law says you have 90 days to prepare. Even now, we are just asking for comments from relevant parties. We are ready. We will not use the 90 days,” he said.

“We’re in a hurry, we want to do things the right way. The amendments to the Build-Operate-Transfer law, we did that in 100 days, that’s the right thing to do. There’s a sense of urgency,” he added.

Mr. Diokno said that the MIF will finance big-ticket projects that would have otherwise been funded by the budget.

“Instead of using the budget to fund big projects, it can be funded through the Maharlika. For example, the Bataan-Cavite bridge — we won’t put that in the budget. We won’t have to borrow money for that,” he added.

Mr. Diokno said the search is on for potential board members of Maharlika Investment Corp., which will manage the fund.

“We’re going to do a job search…. We’ll follow the law. We can invite people,” he added.

The MIF will be funded by the Land Bank of the Philippines and the Development Bank of the Philippines, which are required to contribute P50 billion and P25 billion, respectively.

The National Government will also provide P50 billion.

The Bangko Sentral ng Pilipinas will also surrender 100% of its dividends to the fund in the first two years.

Funds may also be taken from the Philippine Amusement and Gaming Corp. and proceeds from privatization exercises and transfers of government funds.

The government has said that the MIF’s return on equity could be as much as 8.64% each year.

The MIF aims to promote socio-economic development by boosting returns, optimizing assets, and making strategic and profitable investments in key sectors.

According to the latest version of the bill available on the Senate website, it also aims to “obtain the optimal absolute return and achievable financial gains on its investments; and to satisfy the requirements of liquidity, safety/security, and yield in order to ensure profitability.” — Luisa Maria Jacinta C. Jocson