New Philippines sovereign wealth fund aims high but divides opinion
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New Philippines sovereign wealth fund aims high but divides opinion

Filipino President Marcos Delivers State Of The Nation Address
Philippine president Ferdinand Marcos Jr delivers his second State of the Nation Address. Photo: Getty

President Ferdinand Marcos Jr’s latest policy splash is the $8.8 billion Maharlika Investment Fund, a sovereign wealth vehicle that aims to boost growth and inward investment. But it has drawn criticism, even within Marcos’s family. Many highlight the cautionary tale of Malaysia’s 1MDB, and fret about the capacity for corruption and poor governance.

If Ferdinand Marcos Jr was looking for a big, bold idea to celebrate his first year in office, he definitely found one. The president of the Philippines unveiled the Maharlika Investment Fund, the world’s newest sovereign wealth fund, in July.

As these funds go, the MIF will begin life on the small side. It will start with authorized capital of about P500 billion ($8.8 billion). Of that, P375 billion will be raised by the government and state-linked agencies and corporations. The remainder will be generated via dividends from the Bangko Sentral ng Pilipinas (BSP), the central bank, and investible funds from two state-linked lenders, Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP).

Why now? What prompted Marcos Jr, son of the former president and dictator Ferdinand Marcos Sr, to make such a splash with the first big policy of his second year in office? How will it be funded and run, and by whom? And does the highly populated but widely impoverished southeast Asian state really need this kind of sovereign structure to tend and manage?

To the first of those questions, there are answers but no logical reasons. The MIF’s website calls the fund a “timely and necessary measure to unlock the country’s growth potential” at a time of rising interest rates and global uncertainty.


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