President of the Philippines approves the establishment of a $9 million sovereign fund

Philippine President Bongbong Marcos signed a bill on Tuesday to establish a sovereign wealth fund worth $9 billion aimed at boosting economic growth and infrastructure spending, amid warnings from his critics about potential misuse.

Marcos had been pressuring Congress to swiftly approve the bill, which was introduced by his son and cousin late last year.

During the signing ceremony at the presidential palace, he announced that the fund would allow for a "small portion" of government funds to be allocated without increasing the country's debt burden.

A week before his second State of the Nation Address, Marcos had stated, "We will use a small portion of government funds allocated for investment to stimulate the economy without increasing taxes and debts."

Despite his statements, a small group protested near the palace against the bill, considering the fund to be a "hoax" that would jeopardize public funds.

The "Maharlika Investment Fund," with a total cost of 500 billion pesos, will be primarily funded by the national government, especially the central bank, revenue from gambling operations, and two government-owned banks. It will also allow private banks and companies to invest.

The initial proposal was to create a $4.9 billion fund, partially financed by public and private sector retirement funds, which raised concerns about the safety of retirement savings.

However, the latest version of the bill, approved by Congress in May, clarified that the fund would not be financed by retirement savings.

President Marcos said on Tuesday that the fund would help the government achieve its economic growth goals and reduce reliance on external borrowing to cover road paving and new bridge construction costs.

He emphasized that the fund would be transparent and highlighted the appointment of top financial experts to manage it.

Marcos stated that the fund's resources would be carefully and honestly managed.

Traditional sovereign wealth funds are funded through exceptional profits generated by natural resources such as oil or minerals.

 

 

 

 

 

 

 

AFP