FINANCE Secretary Benjamin E. Diokno on Wednesday defended the Maharlika Investment Fund (MIF), recently approved by the 19th Congress, from criticism by University of the Philippines School of Economics (UPSE) faculty members who urged President Ferdinand R. Marcos Jr. to reconsider signing it into law.
Diokno said the enactment of the MIF and the proposed Public Private Partnership (PPP) Act would easily double the country’s annual infrastructure spending to as much as 12 percent of gross domestic product (GDP).
Diokno made the defense of the MIF despite the position paper from his colleagues at the UPSE. He said President Ferdinand R. Marcos Jr. will not retreat from enactment of the MIF, while stressing that the appeal of his UPSE colleagues was “too late.”
Doubling infra spending
ACCORDING to Diokno, doubling the country’s infrastructure spending hinges on the success of the proposed PPP Act and the implementation of the MIF.
The Finance Secretary estimated that as early as next year the country could see its annual infrastructure spending program hitting 10 percent to 12 percent of GDP from the current 5-percent to 6-percent share. The Marcos administration wants to sustain its infrastructure expenditure program of 5 percent to 6 percent of GDP annually until 2028.
This year, the government’s infrastructure programmed is pegged at almost P1.3 trillion, which is equivalent to 5.3 percent of the country’s GDP.
“If the PPP and the MIF push through, we can reach 10 percent to 10 percent per year [in terms of infrastructure spending]. The 5 percent to 6 percent [infrastructure spending] comes from the budget, therefore, more or less it is assured,” Diokno told reporters in a chance interview last Wednesday in Pasay City.
“Most of the priority projects already have feasibility studies and some are in detailed engineering [stage]. [Attaining the 10 percent to 12 percent infrastructure spending of GDP] could be as early as next year,” he added.
Diokno was referring to the P8.167 trillion worth of 194 infrastructure flagship projects approved by the National Economic and Development Authority (Neda) board. (Related story: https://businessmirror.com.ph/2023/05/22/after-dataset-cleanup-infra-cost-cut-to-%E2%82%A78-2t/)
“When you go to the [Neda] list, you will see that the projects we approved are impressive. These are not white elephants —these went through a very robust review by the Neda [board],” he said. “And my colleagues at UPSE should respect the Neda. Many of them are from Neda,” Diokno, a Professor Emeritus of UPSE, added. Diokno earlier expressed optimism that the PPP bill, which seeks to provide a “unified” legal framework for all PPPs at the national and local levels and covering all types of PPP arrangements, would be enacted into law this year.
‘Good’ reading material
REACTING to the discussion paper published by 21 UPSE faculty members, Diokno advised his colleagues to “read” the Senate version of the MIF bill, as lawmakers have included sufficient safeguards to ensure that the MIF is properly and prudently used.
“This Maharlika fund is really going to be very useful for us [It will be] another source of funding for our desire to boost infrastructure,” he said.
Diokno said he did not know the UPSE faculty members would come up with a discussion paper on the MIF. Nonetheless, he said the paper came too late since Congress has completed deliberations on the MIF bill, which is expected to be transmitted to Marcos in two weeks.
“Medyo late na nga ’yung [discussion paper]. Tapos na iyong ano. Ano pa? Para que pa? Tapos na eh, kumbaga sa ano, tapos na iyong boxing. Nililinis na lang iyong bill [The paper is quite late. And for what? As they say, the boxing bout is finished. The bill is just being cleaned up], and it will reach the President’s desk in two weeks,” he said.
“It is a good reading material,” Diokno added.
The UPSE discussion paper described the measure as “still beyond repair.” The faculty members expressed “grave concerns” regarding the proposed MIF and urged Marcos to “seriously reconsider” enacting the measure into law.
The paper had six arguments on why the MIF “violates” fundamental principles of economics and finance and how it poses “serious” risks to the economy and the public sector. (Related story: https://businessmirror.com.ph/2023/06/07/upse-faculty-members-air-grave-concerns-with-mif/)