President Ferdinand R. Marcos Jr. signed into law Senate Bill No. 2020 and House Bill No. 6608, establishing the Maharlika Investment Fund (MIF) at the Rizal Hall, Malacañang Palace today, July 18, 2023.
Budget Chief welcomes MIF, offers assistance for IRR
Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman congratulated PBBM and Congress as she welcomed the good news: “The creation of this Development Fund is very good news because this means we now have an opportunity to expand our fiscal space for the government’s priority programs.”
The Budget Chief also assured the public that the DBM will continue to provide support and technical assistance in the formulation of the Implementing Rules and Regulations and during the implementation of the said Act.
“Of course, we fully support this as it will help expand our fiscal space. So we at the DBM remain committed to helping ensure that this Development Fund will be a success and implemented with utmost integrity,” Secretary Pangandaman said.
Tool for Economic Development
The MIF is a tool for economic development that will promote fiscal stability through strategic and profitable investments in key sectors. The Fund is envisioned to be invested in a wide range of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, joint ventures, mergers and acquisitions, real estate and high-impact infrastructure projects, and projects that contribute to the attainment of sustainable development. Unlike other Government-Owned or -Controlled Corporations (GOCCs), the MIF will be able to maximize government assets through its investments in projects that generate bigger returns.
The MIF is also seen to optimize national funds by generating returns to support the PBBM Administration’s economic goals as set in the Medium-Term Fiscal Framework (MTFF), the 8-point Socioeconomic Agenda, and the Philippine Development Plan (PDP) 2023-2028. The establishment of the MIF will provide the government with a long-term source of income that will support generations to come. It will also ease the burden on the national budget by providing additional funding for other priority projects of the government.
Expanding fiscal space without imposing new taxes
In a previous Joint Statement, the Economic Team underscored how the MIF will allow the government to execute and sustain high-impact and long-term economic development programs and projects by widening the country’s limited fiscal space without imposing new taxes or being too reliant on foreign and domestic loans.
Finance Secretary Benjamin E. Diokno explained: “The Fund is an additional vehicle that would allow the government to tap surpluses that cannot be utilized under current legal frameworks. It will also be open to co-financing with foreign investors and multilateral institutions to facilitate financing of capital-intensive big-ticket infrastructure.”
The Economic Team further believes that the MIF will sustain the country’s recent economic gains and accelerate socio-economic transformation by improving the country’s fiscal resilience.
Senate Bill 2020 was passed on May 31, 2023, while House Bill No. 6608 was passed on December 15, 2022. – PR