Maharlika fund weakens Bangko Sentral, puts economy at risk, groups warn

ABS-CBN News

MANILA - As the Senate deliberates on the Maharlika Investment Fund (MIF), several groups warned that the proposed sovereign wealth fund poses several risks to the Bangko Sentral ng Pilipinas.The Management Association of the Philippines (MAP), the Foundation for Economic Freedom (FEF) and the UP School of Economics Alumni Association (UPSEAA) issued a joint statement on Wednesday saying the MIF “is fundamentally flawed and does not achieve the stated economic activities cited in its formation.”“While we note that the State-managed pension funds have been removed as funding in the newly passed House Bill No. 6608, also known as the Maharlika Investment Fund Act, it is now the BSP, our government financial institutions (GFIs), and ultimately the national government (NG) that are in harm’s way,” the groups said.In the version of the bill filed in the Senate, the MIF will be partially funded by the Bangko Sentral ng Pilipinas which will remit 100 percent of its dividends for 2 years to the Fund, and 50 percent in the succeeding years.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/01/23/23/maharlika-investment-fund-bill-filed-in-senate">Sen. Mark Villar files Maharlika Investment Fund counterpart bill in Senate</a></li></ul>“In the succeeding fiscal years, the BSP shall remit fifty percent (50%) of its declared dividends to the Fund and the remaining fifty percent (50%) to the NG to fund the increase in the capitalization of BSP in accordance with Section 2 of R.A. No. 7653, as amended by R.A. No. 11211, until the increase in the capitalization of BSP has been fully paid. thereafter, BSP shall remit one hundred percent (100%) of its declared dividends to the Fund,” according to the bill filed by Senator Mark Villar.MAP, FEF and the UPSEAA said “this not only amends the BSP’s mandate to promote monetary stability by adding an earnings factor for the MIF in its key performance indicators, but also effectively deprives the BSP of its ability to strengthen itself from its earnings to manage liquidity and inflation, as well as help distressed financial institutions.”“It compromises the BSP’s autonomy, independence, and ability to deliver on its price and financial stability mandates,” the three groups warned.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/01/30/23/hong-kongs-sovereign-wealth-fund-suffers-record-loss">Hong Kong&#x27;s sovereign wealth fund suffers record loss</a></li>	<li><a href="https://news.abs-cbn.com/business/01/31/23/norways-sovereign-wealth-fund-loses-164-billion">Norway&#x27;s sovereign wealth fund loses $164 billion in 2022</a></li></ul>The groups’ joint statement saidf the BSP’s monetary objectives could be at odds with the MIF’s need for funding through the BSP’s earnings and dividends.They noted that the BSP imposes reserve requirements on banks, on which it may pay interest.“Easing these requirements reduces the “income” of the BSP, and by extension its dividends, but it boosts the economy by lowering the costs of financial intermediation.”They also noted that the BSP intervenes in the foreign exchange market, to create a more stable environment for companies.“Such interventions can cause the BSP to gain or lose profits. Should the BSP’s forex stabilization efforts be tainted by pressure to maximize dividends for the MIF?”<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/12/12/22/congress-urged-let-bsp-reach-p200b-capitalization-before-funding-maharlika">Congress urged to let BSP reach P200B capitalization before funding Maharlika</a></li></ul>The groups said the MIF was flawed as its “funding of the MIF will not come from significant surpluses from commodity earnings or government operating results.”“Instead, the funding will be extracted from – and weaken – the BSP, GFIs, and other GOCCs. Weakening the BSP will reduce its ability to fulfill its primary purposes, and relying on the BSP’s dividends will engender systemic risks.”President Ferdinand Marcos Jr. has called for a swift passage of the MIF bill, filed by his son and a cousin in the House of Representatives, saying this will allow the government to earn extra funds to finance projects.The House passed the proposal in December. The Senate must pass a counterpart bill for the measure to become law.<ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/news/01/31/23/senate-wont-rush-maharlika-bill-zubiri">Senate won&#x27;t rush Maharlika bill, says Zubiri</a></li>	<li><a href="https://news.abs-cbn.com/news/01/30/23/mga-senador-pinulong-ukol-sa-maharlika-fund">Econ managers pinulong ang mga senador ukol sa Maharlika fund</a></li></ul><div>RELATED VIDEO</div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=2444011" width="100%"></iframe></figure><div class="iwantbar">Watch more News on <a href="https://www.iwanttfc.com/#!/browse/Genres/News/tag_id_genres/id_news" target="_blank">iWantTFC</a></div>

As the Senate deliberates on the Maharlika Investment Fund, several groups warned that it poses several risks to the Bangko Sentral ng Pilipinas. 

Maharlika fund weakens Bangko Sentral, puts economy at risk, groups warn | ABS-CBN

Halalan 2025

Entertainment

News

Metro.Style

Sports

More

Traffic

Horoscope

Business

Maharlika fund weakens Bangko Sentral, puts economy at risk, groups warn

Maharlika fund weakens Bangko Sentral, puts economy at risk, groups warn

ABS-CBN News

Published Feb 01, 2023 05:03 PM PHT

Read More:

Maharlika fund

MIF

sovereign wealth fund

BSP

economy

ABS-CBN is the leading media and entertainment company in the Philippines, offering quality content across TV, radio, digital, and film. Committed to public service and promoting Filipino values, ABS-CBN continues to inspire and connect audiences worldwide.

Corporate

Investors

Governance

International Distribution

Corporate

Governance

Investors

International Distribution

NPC Seal of Registration

Privacy Policy

AI Policy

Terms of Service

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.

NPC Seal of Registration

Privacy Policy

Terms of Service

AI Policy

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.

NPC Seal of Registration

Privacy Policy

Terms of Service

AI Policy

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.