By The Financial District
Oct 21, 20232 min
Finance Secretary Benjamin E. Diokno made a strong pitch for investment opportunities in the Philippines' Maharlika Investment Fund (MIF) and Islamic finance before top Saudi business leaders during a roundtable meeting, at the St. Regis Hotel in Riyadh, Saudi Arabia.
The Finance Secretary also expressed optimism about working with other sovereign wealth funds to partner with and from which to learn best practices. I Photo: Department of Finance Facebook
"At the beginning of President Ferdinand Marcos, Jr.'s administration, the Philippine government set its sights on establishing institutions for long-term investments with a singular vision – a better quality of life for generations of Filipinos to come," he said.
The MIF aligns with the Marcos, Jr. administration's 8-Point Socioeconomic Agenda for poverty reduction and the Philippine Development Plan (PDP) 2023 to 2028 for deep economic and social transformation.
The Fund was designed to catalyze economic development and accelerate the country's growth by optimizing the use of government financial assets and promoting their intergenerational management.
"To achieve this, Maharlika aims to attract capital from both domestic and global equity investors, including large funds here in the Middle East seeking to diversify their portfolios in fast-growing emerging markets like the Philippines," Secretary Diokno said.
Investments in the Fund will be used to fast-track the implementation of the Philippines' approximately 197 high-impact infrastructure flagship projects (IFPs) worth around US$153 billion.
"The Fund also presents exciting opportunities for green and blue investments, ESG-linked fixed-income instruments, and cutting-edge technologies with the advent of artificial intelligence and cloud computing," Secretary Diokno shared.
The Finance Secretary also expressed optimism about working with other sovereign wealth funds to partner with and from which to learn best practices.
Governing the Fund is the Maharlika Investment Corporation (MIC), which has an authorized capital stock of around US$8.9 billion – US$6.6 billion are common shares for subscription by the National Government and its instrumentalities, while the remaining US$2.2 billion are preferred shares open for subscription by the National Government, as well as reputable private financial institutions and corporations.
Private and state-owned financial institutions can make direct investments in the MIF's sub-funds, which offer specific investment strategies. Secretary Diokno assured investors of the Fund's safeguards, which were founded on the Santiago Principles that promote transparency, good governance, accountability, and prudent investment practices.
Other mandatory safeguards include an internal and external auditor, a Joint Congressional Oversight Committee, and the examination of the Commission on Audit (COA).
"We look forward to your partnership and investment as we proceed with the full operationalization of the Fund by the end of 2023," he said.
Apart from the MIF, Secretary Diokno also urged investors to tap into the diverse investment opportunities in the Philippines' Islamic finance sector, saying it would drive economic growth and prosperity for all Filipinos.
According to Secretary Diokno, the Bangko Sentral ng Pilipinas (BSP) has adopted a single regulatory framework for both Islamic and conventional banks, enabling them to thrive on a level playing field.