Multilaterals eyed as Maharlika investors

MANILA, Philippines — The government is looking at multilateral lenders as investors in the country’s first sovereign wealth fund – a move seen to ensure stability and credibility of the fund.

In a briefing, Finance Secretary Benjamin Diokno said the government is hoping that multilaterals, such as the Asian Development Bank (ADB) and the International Finance Corp. of the World Bank, would invest in the Maharlika Investment Fund (MIF).

“It is favorable if they invest as it can give an impression that this is a sound and stable fund,” Diokno said.

He added “there is a lot of interest” in the fund, but no formal commitment has been made considering that the MIF law was just recently enacted.

National treasurer Rosalia de Leon said the government would initiate a conversation with the multilaterals once the implementing rules and regulations (IRR) for the MIF are finalized.

“We understand that they would like to see the investment policy, the IRR. And, of course, the most common question is who would be running it and who would be the face (of the fund),” De Leon said in the same briefing.

To date, ADB and the World Bank have yet to openly comment on their interest in investing in the MIF.

Diokno maintained that any interest from the multilaterals would really depend on the “management and the policies.”

Economic policy think tank Foundation for Economic Freedom (FEF) earlier said the success of the MIF would depend on investors who would put their resources into the fund.

“If it can get multilaterals or global investment funds to be co-investors, the negative effect on debt will be mitigated,” FEF president Calixto Chikiamco said.

“For governance reasons, MIF is better off with a multilateral as a partner,” he said.

On the other hand, he said the success of the fund would depend on investors who would put in their resources.

Apart from multilaterals, Diokno said local government units (LGUs) may also invest, especially those who are in surplus position because of underspending.

As the Philippines’ first-ever sovereign wealth fund, the MIF is designed to catalyze economic development by mobilizing government financial assets that are otherwise limited in use by current legal frameworks.