MAHARLIKA FUND WON’T HAVE NEGATIVE IMPACT ON 2024 NATIONAL BUDGET —DIOKNO

The proposed Maharlika Investment Fund (MIF) will not have a negative impact on next year’s national budget, Finance Secretary Benjamin Diokno said Friday.

Asked if the MIF has already been factored into the estimated P5.768-trillion national budget for next year, Diokno said, "There will be no negative impact on the budget."

Earlier, Diokno said the MIF is expected to be operational before the end of the year, as he expressed optimism that the MIF bill, after being approved by Congress last week, will be signed into law by President Ferdinand Marcos Jr. before he delivers his second State of the Nation Address on July 24.

“The only contribution of the NG (national government) here will be initially the P50 billion that will come from BSP (Bangko Sentral ng Pilipinas). These are dividends, declared dividends by the BSP for the national government for the next two years. After that there will be no more contribution from the BSP,” Diokno said at a press briefing following the 185th Development Budget Coordination Committee Meeting.

The MIF bill states that the Maharlika Fund would be created using:

  • P50 billion from the Land Bank of the Philippines (LBP)
  • P25 billion from the Development Bank of the Philippines (DBP)
  • P50 billion from the national government

The contribution from the national government would come from the following sources:

  • Bangko Sentral ng Pilipinas' total declared dividends
  • National government's share of the income of PAGCOR
  • Properties, real and personal identified by the DOF-Privatization and Management Office
  • Other sources such as royalties and/or special assessments

“The contribution of Landbank is P50 billion and DBP is [P25 billion] … these are very small relative to their investible funds,” Diokno said, noting that the contributions of state-owned banks to the MIF are “only 3% of their total investible funds.”

“Why is it smart for them to invest in the Maharlika fund? Because right now they are investing in low returns. In fact, the 10-year ROI (return on investment) of Landbank is 4.23%, this is a combination of where they put their money, and for DBP it’s less than 4%,” the Finance chief said.

“But there’s a possibility that if they invest their money in Maharlika it could earn as much as 8.64%,” he added.

The Bureau of the Treasury and the Department of Budget and Management have said that the MIF will free up the government’s fiscal space as the burden of borrowing to fund infrastructure projects will be unloaded on the sovereign wealth fund.

The national government operates on a fiscal deficit—meaning state spending exceeds its income—which compels it to borrow from both domestic and foreign sources to plug the shortfall.

“I think it [Maharlika] will have a positive impact. If this succeeds, as I said, what is in the budget is around 5-6% [of GDP] spending for infrastructure. If our desire for public-private partnerships and Maharlika succeed, I think we can possibly look at around 10-12% infrastructure as a percent of GDP because we have already identified something like 194 projects,” Diokno said.

“With additional funding we can easily implement many of these projects,” he added. —VBL, GMA Integrated News

This article Maharlika Fund won’t have negative impact on 2024 national budget —Diokno was originally published in GMA News Online.

2023-06-09T12:11:19Z dg43tfdfdgfd