Economist: Maharlika fund could spur economic growth

ECONOMIC DRIVER. Economist Michael Ricafort on Monday (Nov. 13, 2023) says the Maharlika Investment Fund can help reduce the country’s debt, if managed properly. To achieve this, Ricafort said those who will make up the Maharlika Investment Corp. should have specialized skills to manage the fund. (PNA file photo)

MANILA – The Maharlika Investment Fund (MIF), if managed properly, could help spur economic growth and reduce the country’s outstanding debt, an economist said on Monday.

During the Bagong Pilipinas Ngayon briefing, Rizal Commercial Banking Corporation chief economist Michael Ricafort said the MIF could help in fiscal management.

“Makakatulong din po iyon sa fiscal management ng ating bansa, imbes na hiram nang hiram, utang ng utang, eh mabawasan po iyong additional na utang (This will also help the fiscal management of our country, instead of borrowing, [this will] reduce the additional debt) to finance the budget deficit especially in financing, this major infrastructure project na pinaka-kailangan ng ating bansa (that our country needs most) from an investment point of view,” Ricafort said.

In a separate interview, Ricafort said that “every PHP240 billion [in returns] is equivalents to about 1 percent of the economy in terms of economic growth and development, as well as the effective reduction of outstanding debt.”

Ricafort, however, cited the importance of making sure that funds are effectively channeled to the most important infrastructure and other projects.

During the briefing, Ricafort highlighted the importance of having more stringent qualifications for those who will comprise the Maharlika Investment Corporation (MIC).

“[Qulifications] should be more stringent when it comes to expertise, experience, competence, integrity, and good track record in delivering high returns on fund management,” he said.

“These are specialized skills required in the global fund management industry, transcending college, masteral, other post-graduate courses. [There] should be talent to make money and deliver superior returns on fund management,” Ricafort added.

Ricafort said those who will be in the MIC should have a “good track record of performance and integrity.”

Under the law, the MIC will serve as the primary vehicle for mobilizing and utilizing the MIF for investments in transactions aimed at generating optimal returns on investments (ROIs).

On Monday, President Ferdinand R. Marcos Jr. appointed Rafael Consing Jr. as president and chief executive officer of MIC.

“Consing [has a] wealth of experience as former CFO (chief financial officer) of ICTSI (International Container Terminal Services, Inc.), among the world’s largest port operators, and former treasurer of Abotiz Group, both infrastructure-related firms. [He was] also a veteran banker,” he said.

Asked to comment on whether the President’s power to reject recommended appointees will be an issue to potential investors, Ricafort said “hindi naman siguro (I don’t think so).”

“Hindi naman siguro, kasi ganoon nga iyong konsepto, iyong prinsipyo na may prerogative talaga iyong ano, iyong — kung siyempre kung iyong binigyan ng kapangyarihan ng batas ng constitution. So, iyong Presidente, hindi ba kung sino iyong hinalal ng mga tao ‘no (I don’t think so because that’s the concept, the principle, that he really has the prerogative, if of course if you were given power by the law or the constitution.

So, that’s the President who is elected by the people),” he said.

“So, iyong appointment nanggagaling po sa executive, pero pagkatapos po noon, pag magpa-function na sila, independent na sila. So, nandodoon naman po iyong check and balances na tinatawag (So, that appointment comes from the executive, but after that, when they start functioning, they are independent. So, there will be checks and balances also),” he added.