DOF's Diokno: No projection yet on how much Maharlika fund can grow
Amid criticisms on the lack of a business plan for the proposed Maharlika Investment Fund, Finance Secretary Benjamin Diokno said on Friday that there was no estimate yet how much the sovereign wealth fund would grow should it be established.
“We don’t have any projection [yet]… But there's a lot of money floating around,” Diokno said at the sidelines of the Asia CEO Forum on Friday in Pasay City.
During the Senate Committee on Banks, Financial Institutions and Currencies' second hearing on the MIF bill, Senators Nancy Binay and Sherwin Gatchalian questioned the lack of a business plan for the proposed sovereign wealth fund.
In particular, Binay pointed out that there would be no envisioned returns as the bill provided no specific projects.
Gatchalian added that legislators would be more comfortable if they could see where the fund would be invested.
During the hearing, National Treasurer Rosalia de Leon said that the economic team was working on the "returns" envisioned from the MIF and that the National Economic and Development Authority (NEDA) had identified 87 projects in which the fund could be invested.
While there were no projections yet on how much the MIF would grow, Diokno was nevertheless optimistic that it would “attract more investments,” noting that the initial funding coming from the investible resources of the Landbank of the Philippines (P50 billion), the Development Bank of the Philippines (P25 billion), and the dividends/profits of the Bangko Sentral ng Pilipinas (BSP) were only the “seed money.”
The Finance chief explained that Indonesia’s sovereign wealth fund - INA or Indonesia Investment Authority - had grown to as much as $20 billion from a seed money of $2 billion or equivalent to about P100 billion.
On criticisms that the MIF lacked a concerted business plan, Diokno echoed de Leon’s comment that the economic team would eventually come up with a plan once the Maharlika Investment Corporation, which will manage the sovereign wealth fund, was established.
Nonetheless the Finance chief said the MIF would fund public road, tollway, renewable energy, water works, telecommunications, and agriculture infrastructure projects.
“Creating the fund will entail higher returns both in the short-term and long-term that will redound to inclusive and sustainable growth,” said Diokno. — DVM, GMA Integrated News