CAMARINES Sur Rep. LRay F. Villafuerte considers the legislative approval of the Maharlika Investment Fund (MIF) as opening gates to a “potentially-huge” source of investment funds that would let the national government (NG) spend bigger on its big-ticket programs.
Villafuerte said the MIF bill is envisioned to provide a new funding stream for investments other than the traditional sources of funds, namely, the General Appropriations Act (GAA) or national budget, “official development assistance [ODA] from our overseas partners and the business sector via the public-private partnership [PPP] mode.”
“As another, potentially immense, funding instrument for priority investments of the NG, the MIF has the makings of a prime source of fresh capital for accelerated infrastructure development, agricultural modernization and food security, climate action, energy development and other big-ticket projects that the Marcos administration needs to carry out to shore up the President’s ‘Agenda for Peace and Prosperity,” said Villafuerte, who is a co-author of the House version—House Bill (HB) 6608—of the approved consolidated MIF bill.
The final version of the MIF bill was approved last week by the House of Representatives and the Senate on the eve of Congress’s sine die adjournment.
Two drawbacks
VILLAFUERTE said that in becoming a new investment fund source for high-impact, economically-viable programs and projects, “the MIF would help the NG prevail over two drawbacks that threaten to handicap the Marcos administration’s agenda to sustain the robust economic growth path post-pandemic, create jobs and attack poverty, and keep the Philippines on its path of becoming a prosperous middle-class society in less than two decades.”
He cited one of two main challenges to high and inclusive growth as “government’s presently limited fiscal space.” The latter, Villafuerte said, is “a consequence of the immense public spending on Covid-19 response that the preceding Administration have had to resort to.”
The second challenge, according to the lawmaker, is the “economic slowdown across the world resulting from, among others, the intertwined factors of persistent elevated inflation, international oil price shock, and Russia’s invasion of Ukraine that continues to impact global supply chain logistics.”
As pointed out by the government’s economic team, Villafuerte said the MIF could partly bankroll the pipeline of 194 flagship projects approved by the National Economic and Development Authority (NEDA) and requiring total funding of P9 trillion.
‘Doubting Thomases’
ACCORDING to Villafuerte, these projects are those on physical and digital connectivity, irrigation and water supply, flood management, health, energy, agriculture, climate change mitigation and other major infrastructure.
Villafuerte said the “doubting Thomases” have no reason to worry about possible fund misuse as the MIF bill has assorted safeguards in place. The latter includes the required internal and external audits by the board of the Maharlika Investment Corp. (MIC), the periodic review by a Congressional oversight committee, scrutiny by the Commission on Audit (COA) and its adherence to the government procurement law.
Unlike other state-run corporations, he said the MIC can maximize use of government assets through its would-be investments in projects that generate bigger returns.
Under the bill, the MIC is the corporate body to be created upon enactment of the measure into law, and it shall have an authorized capital stock of P500 billion.
Villafuerte noted that the final congressional version explicitly prohibits state-run pension funds from investing in the MIF.
These pension funds that will no longer provide seed money—as originally proposed—for the MIF are those managed by the Government Service Insurance System, Social Security System, Philippine Health Insurance Corp., Home Development Mutual Fund, Overseas Welfare Workers Association and Philippine Veterans Affairs Office.
