Balisacan: State-owned banks infusing all investible funds into Maharlika fund not a good idea

Having the state-owned banks infuse all their investable funds into the proposed Maharlika Investment Fund would not be a good idea as these should be channeled into diversified assets, a top official of the government’s economic team said.

During his hearing with the Commission on Appointments (CA), Socioeconomic Planning Secretary Arsenio Balisacan was questioned on his view on having the Land Bank of the Philippines and the Development Bank of the Philippines (DBP) placing all their investable funds into the sovereign wealth fund.

“I don’t think that is a good idea as again, the portfolio of LandBank has to be diversified enough to allow it to absorb (shocks),” he said.

Balisacan hinted at his willingness to source funds from the state-owned lender, but “not to the extent that it’s overexposed… It has to manage its portfolio too.”

Under the proposed Maharlika Investment Fund (MIF), previously called the Maharlika Wealth Fund, the seed funding will come from LandBank with P50 billion, the DBP with P25 billion, and dividends and profits of the Bangko Sentral ng Pilipinas (BSP).

The LandBank is mandated to promote countryside development while remaining financially viable, while the DBP is mandated to provide banking services principally to cater to the medium and long-term needs of agricultural and industrial enterprises with emphasis on small and medium-scale industries.

Asked for his view on where to source the seed funding for the MIF, Balisacan said “we have to build it over time.”

The MIF initially aimed to have a capital of P275 billion with P175 billion coming from the Government Service Insurance System (GSIS) and the Social Security System (SSS), but lawmakers dropped these funding sources to douse public opposition.

With the seed funding, the proposed measure seeks to allow the government to invest surplus reserves in real estate and financial assets for more gains.

The measure is backed by the government’s economic cluster led by Finance Secretary Benjamin Diokno, who said that criticisms of the measure come from those who have yet to read it in full, as safeguards will be put in place to ensure transparency.

Among the authors of the proposed measure is House Speaker Ferdinand Martin Romualdez, and Ilocos Norte 1st District Representative Ferdinand Alexander “Sandro” Marcos III, cousin, and son of President Ferdinand “Bongbong” Marcos Jr. respectively.

Several groups have already expressed concern over the measure are business groups such as the Makati Business Club (MBC), the Management Association of the Philippines (MAP), the Philippine Chamber of Commerce and Industry (PCCI), and the President’s sister and Senator Imee Marcos. —NB, GMA Integrated News