Proposed PH sovereign wealth fund gets boost at WEF

FILE: President Ferdinand R. Marcos Jr. attends the formal opening of the 2023 World Economic Forum at the Davos Congress Centre in Switzerland. (PCO Photo)

MANILA – President Ferdinand R. Marcos Jr. has earned the backing of the World Economic Forum (WEF) participants when he presented the Philippines’ proposed sovereign wealth fund (SWF), Malacañang said on Wednesday.

In a statement, Communications Secretary Cheloy Garafil said Marcos received positive feedback after he made a soft launching of the planned SWF, otherwise known as Maharlika Investment Fund (MIF).

During the Philippines’ Country Strategy Dialogue at WEF in Davos, Switzerland, Marcos said the process for the establishment of the MIF is already in the pipeline.

“The process of establishing our first-ever sovereign wealth fund is underway,” he said in his opening remarks.

“Such a fund is one tool among many in our efforts to diversify our financial portfolio, which includes our existing institutions pursuing investment that will generate stable returns, but also welfare effects spanning employment creation, improvement of public service, and a decrease in costs of economic activities,” Marcos added.

House Bill 6608 (HB 6608) or the proposed MIF Act is an independent fund that adheres to the principles of good governance, transparency and accountability and shall be sourced from the investible funds of select government financial institutions (GFIs), contributions of the national government, declared dividends of the Bangko Sentral ng Pilipinas and other sources.

Under the proposed measure, the fund shall be used to invest on a strategic and commercial basis in a manner designed to promote fiscal stability for economic development and strengthen the top-performing GFIs through additional investment platforms that will help attain the national government’s priority plans.

The House of Representatives approved HB 6608 on the third and final reading on Dec. 15, 2022. It was transmitted to the Senate on Dec. 19, 2022.

Senator Mark Villar, who is part of the official Philippine delegation in Switzerland, said many of WEF attendees have expressed interest in the Philippines and its proposed MIF.

The plan to create a sovereign wealth fund would help the country generate income and improve its fiscal health, Villar said.

“So through the wealth fund, magkakaroon ng additional income and fiscally mag-i-improve ‘yung fiscal situation ng ating bansa (our country will have an additional income and our fiscal situation will improve),” Villar said in an interview in Davos.

‘Well-performing’ PH

Meantime, Marcos also earned praises from the International Monetary Fund (IMF) for his administration’s initiatives and efforts to sustain the Philippines’ economic growth, Garafil said in another statement.

This, after Marcos held a bilateral meeting with IMF managing director Kristaline Georgieva on the sidelines of WEF on Tuesday (Zurich time).

Georgiva said the Philippines turned to be an “exceptionally well-performing country” under his leadership.

“What you have done in the last year of turbulence to sustain growth… is quite commendable,” Georgieva, as quoted by the Presidential Communications Office (PCO), told Marcos.

Georgieva also expressed the IMF’s readiness to help its member countries, including the Philippines, in achieving sustainable growth and pushing for economic policies that would benefit more Filipinos.

“We have been really interested to engage more deeply with our members to recognize the traditional challenges… They are still there,” she said, after Marcos raised the need for the Philippines to “go back to the basics” amid the present challenges confronting the country.

Marcos, during the meeting, admitted that there are “weaknesses” in the country’s different systems, including food supply, energy, infrastructure and climate change.

The IMF is a special agency of the United Nations which focuses on promoting global monetary cooperation, ensuring financial stability and facilitating international trade.

The Philippines joined the IMF on Dec. 27, 1945.

The Marcos administration is expecting a strong full-year gross domestic product (GDP) growth for 2022, most likely much faster than its growth target of 6.5 to 7.5 percent.

For 2022, the government forecasts the country’s economy to grow by around 7 percent, Marcos said during the Country Strategy Dialogue.

Consistency

In a separate meeting with Marcos, former United Kingdom Prime Minister Tony Blair stressed the importance of “consistency” when it comes to business.

“There should be some kind of stability, some kind of consistency whichever way you’re going. So in terms of policy from the political end, I think it’s important,” Blair, who concurrently serves as the executive chairman of the Tony Blair Institute For Global Change, said during his meeting with Marcos.

Blair issued the statement, as he noted that the Philippines’ standing last year was “not quite good.”

“So to have somebody to come and articulate very clearly where the country is going, what it’s doing. I think it sends a good signal,” Blair said, referring to Marcos.

Marcos, in response, agreed that investors need to know the conditions set by any country that could be their potential investment destination.

This is the third time Marcos met Blair in person. They first met on the sidelines of the United Nations General Assembly in New York City in September 2022. Their second meeting happened in Manila in October 2022.

In their latest meeting, Marcos and Blair discussed the country’s development plan, Garafil said.

“Blair and President Marcos also discussed the country’s development plan, which the President said will not only be for economic development but also for the country’s social upliftment,” she said.

“This is to alleviate the people’s suffering as a result of the pandemic and as the country prepares for the opening of the global economy. The Philippines’ development plan focuses on digitalization, logistics, infrastructure development, energy, tourism and food security,” Garafil added.

Marcos’ investment pitch for the Philippines also received “a very positive response” from some of the world’s top chief executive officers and investment experts attending WEF.