MANILA, July 18 — Philippine President Ferdinand Marcos Jr today approved a bill creating the country’s first sovereign wealth fund, which he touted as a key plank of his economic goals to modernise infrastructure and accelerate growth.
The bill, which earlier raised concern including from the central bank over transparency in its governance, has undergone revisions to address worries about how the fund would be managed and financed.
“I assure you the resources entrusted to the fund are taken care of with utmost prudence and intent,” Marcos said in a speech, after signing into law what he described as an “extremely important” measure.
The creation of the Maharlika Investment fund, Marcos said, will also allow the Philippines, one of Asia’s most active issuers of sovereign debt, to cut its reliance on borrowing to fund infrastructure development.
It follows moves by neighbours Malaysia, Singapore, and, more recently, Indonesia, in establishing sovereign wealth funds, albeit with mixed results.
In Malaysia, a multibillion dollar graft scandal engulfed the 1Malaysia Development Bhd (1MDB) fund, causing widespread political repercussions.
Marcos said the new fund would be managed by professionals and be free from political interference.
For its capital, the fund will be allowed to issue a total of ₱500 billion (RM41.68 billion) worth of preferred and common shares which the national government, state-run firms and banks can purchase.
It was not immediately clear when the fund will be launched. It will be allowed to invest in instruments like foreign currencies, tradable commodities, fixed income securities and stocks to generate income to help finance infrastructure projects.
Marcos, who began his six-year term as president in June last year, aims to expand the Philippine economy by as much as 8 per cent to keep its place among Asia’s fastest-growing countries, and halve the poverty rate, which was 18.1 per cent in 2021, the most recent figure.
— Reuters
