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BSP chief says balance sheet strong enough for Maharlika Investment Fund

Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla on Thursday said concerns over the proposed Maharlika Investment Fund have been “completely addressed,” but the final version should still be reviewed to ensure that safeguards are implemented.

Speaking with reporters, Medalla — who earlier raised issues of governance and independence — said he is now in support of the Maharlika Fund being passed into law.

“The BSP’s ability to maintain price stability will not be negatively affected by the current version, and I think removing the pension funds is also, I think, a good response,” he said in Manila City.

“Given that our concerns in the central bank have been completely addressed and the criticism of the inclusion of the pension funds has been addressed as well, I support the passage of the bill,” he said.

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 BSP.

“When you look at it, we’re just postponing when we will get the dividends and right now, our balance sheet is more than strong enough not to be affected by the postponement,” Medalla said.

“I think my view here is that my major concern is our ability to deliver our three pillars. That’s no longer at risk and as I said, the postponement of the dividends, our balance sheet right now is very strong,” he added.

The MIF was 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 earlier this month said the central bank has “too much” reserves which could be used for the fund.

BSP data show, however, that the gross international reserves (GIR) slipped to $93.954 billion in November from $94.027 billion in October, due to outflows from payments of the government for its debt obligations.

Diokno also said that these come from those who have yet to read it in full, as safeguards will be put in place to ensure transparency.

“Let’s not prejudge. We have to look at the final version to see if those concerns are addressed. To me the best case scenario is that the House already approved it, so the debate now moves to the Senate,” Medalla said Thursday.

Diokno has since asked President Ferdinand “Bongbong” Marcos Jr. to certify the bill as urgent, allowing Congress to approve the measure on second and third reading within the same day, dispensing the three-day rule in between readings.

Among the authors of the proposed Maharlika Investment Fund are House Speaker Ferdinand Martin Romualdez, and Ilocos Norte 1st District Representative Ferdinand Alexander “Sandro” Marcos III, cousin and son of the President, respectively.

A number of 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 Maria Imelda “Imee” Marcos.—LDF, GMA Integrated News