Marcos says Maharlika fund may fail if politicians are involved

MANILA — President Ferdinand Marcos, Jr. on Wednesday said the Maharlika Investment Fund would be run by professional managers instead of the government to eliminate political decisions that could lead to failure.

Speaking at the 2023 Asia Summit in Singapore, Marcos said the fund "is not run by the government; it is run by professional fund managers."

"That was always the concept behind it... because once the politicians get involved, then the decisions are no longer purely financial in nature. That causes failure, I think, and that does not make an efficient management of the fund," Marcos said in during his open dialogue with former Australian trade minister Steven Ciobo.

The P500-billion fund will draw most of its seed capital from the national government, including the central bank, gaming revenue and two state-owned banks.

It will be allowed to make a wide range of investments, including in corporate bonds, equities, joint ventures and infrastructure projects. Private financial institutions and corporations will also be allowed to invest.

Marcos said the fund would help the country "transform" the agriculture and energy sectors and the ease of doing business.

It will also help the Philippines veer away from loans, which the government has "started worrying" about, he said.

• Marcos says Philippines' debt-to-GDP ratio ‘worrying’
• Competent managers key to Maharlika fund success: group

"Although there had been many financing institutions like the ADB, the World Bank, JICA... These are essentially, some are grants but mostly they are loans that affect the figure for borrowings," the Philippine leader said.

"We need to invest more. And where can we get funding to invest more without increasing our borrowings? We look internally... [at] the reserves that we have. We all are familiar with the concept that money can't sit in the bank and do nothing. It must work," he continued.

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The Maharlika Investment Corporation needs a president and CEO, two regular directors and three independent directors, according to its implementing rules and regulations.

• Maharlika board should be headed by Filipino: Diokno

National Treasurer Rosalia De Leon last week said there were no applications yet for the posts. But she noted that there had been a couple of inquiries.

• Maharlika IRR released, to take effect Sept. 12: Diokno

The deadline for applications is on Sept. 27.

Marcos had called for a swift passage of the Maharlika bill, filed by his son and cousin late last year, to enable the debt-laden government to earn extra funds to finance infrastructure projects.

Activists and opposition figures have questioned the need for a sovereign wealth fund in the poverty-plagued country and raised concerns about the potential for corruption.

Business groups said the government was already running huge budget deficits and the proposed law risked downgrading its credit rating.

Conventional sovereign wealth funds are seeded by windfall government profits from natural resources, such as oil or minerals.

— With a report from Agence France-Presse