Maharlika Investment Fund: A Sovereign Wealth Fund For The Philippines

The Maharlika Investment Fund (MIF) is the Philippines' first sovereign wealth fund. It was established to advance the Philippines' long-term development goals and accelerate the country's growth by optimizing the use of government financial assets and promoting their intergenerational management. The MIF is designed to catalyze economic development and stimulate the economy by investing in a wide range of assets, including foreign currencies, fixed-income instruments, corporate bonds, commercial real estate, and infrastructure projects. The fund will be managed by the Maharlika Investment Corporation (MIC), which will have an authorized capital stock of 500 billion pesos, with contributions from the National Government, government financial institutions, and private sector shareholders. The creation of the MIF is expected to support the government's economic goals and provide a platform for large global funds and other sovereign wealth funds to enter the Philippines.

The Maharlika Investment Fund is the Philippines' first sovereign wealth fund

The Maharlika Investment Fund (MIF), also known as the Maharlika Wealth Fund (MWF), is the Philippines' first sovereign wealth fund. It was established to advance the Philippines' long-term development goals and accelerate the country's growth by optimizing the use of government financial assets. The MIF is designed to catalyze economic development and promote sustainable economic growth by making strategic and profitable investments in key sectors.

The MIF is managed by the Maharlika Investment Corporation (MIC), which has an authorized capital stock of 500 billion pesos (approximately 8.9 billion dollars). The fund will be allocated across a variety of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects. The MIC will also invest in emerging megatrends such as digitalization, ESG (environment, social, and governance), and healthcare.

The creation of the MIF supports and complements the administration's economic goals set out in the Medium-Term Fiscal Framework, the 8-point Socioeconomic Agenda, and the Philippine Development Plan 2023-2028. It aims to widen the country's fiscal space, ease pressures in financing public infrastructure projects, and reduce reliance on official development assistance. The MIF is expected to generate returns that support these economic goals, while also contributing to the overall objective of reinvigorating job creation and accelerating poverty reduction.

The MIF is a timely and necessary measure to unlock the country's growth potential, especially in a period of rising interest rates and pandemic-induced widening debt levels. By leveraging a small fraction of the country's underutilized investable funds, the MIF will stimulate the economy without the burden of additional fiscal and debt constraints. It will also provide a credible and attractive platform for large global funds and other sovereign wealth funds to enter the Philippines, opening up new opportunities for local and foreign capital participation.

The establishment of the MIF demonstrates the government's commitment to pursuing its goals for economic growth and development. It is a powerful tool to optimize the country's national funds and support key initiatives for the benefit of the Philippines and its people.

It will be allocated across a variety of assets, including foreign currencies, fixed-income instruments, and corporate bonds

The Maharlika Investment Fund (MIF), also known as the Maharlika Wealth Fund (MWF), is the Philippines' first sovereign wealth fund. It is designed to advance the Philippines' long-term development goals and stimulate the country's economic growth. The MIF will be managed by the Maharlika Investment Corporation (MIC), which will have an authorised capital stock of 500 billion pesos (approximately 8.9 billion dollars).

The MIF will be allocated across a diverse range of assets, including foreign currencies, fixed-income instruments, and corporate bonds. Foreign currency investments will allow the fund to capitalise on exchange rate fluctuations and potentially generate higher returns. Fixed-income instruments, such as bonds and money market instruments, will provide a stable source of income and help diversify the fund's risk exposure.

Corporate bonds, issued by domestic and foreign companies, will offer a steady stream of interest income, while also providing the opportunity for capital appreciation. By investing in a variety of corporate bonds, the MIF can balance risk and return, as well as support the growth of local and international businesses. This allocation strategy will enable the fund to optimise returns while managing risk effectively.

In addition to foreign currencies, fixed-income instruments, and corporate bonds, the MIF will also invest in other assets such as metals and other tradable commodities, domestic and foreign equities, Islamic investments, real estate, and infrastructure projects. The fund's diverse portfolio will be managed by the MIC, which will be governed by a Board of Directors, guided by an Advisory Body, and subject to robust governance and transparency standards. The MIF is expected to generate returns that support the government's economic goals and contribute to the country's development.

The Fund aims to stimulate the country's economic growth and social development

The Maharlika Investment Fund (MIF), also known as the Maharlika Wealth Fund (MWF), is the Philippines' first sovereign wealth fund. It is designed to stimulate the country's economic growth and social development by optimizing the use of government financial assets, promoting their intergenerational management, and advancing developmental objectives.

The MIF will be allocated across a variety of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects. The fund will be managed by the Maharlika Investment Corporation (MIC), which will act as the sole vehicle for mobilizing and utilizing the MIF. The MIC will have an authorized capital stock of 500 billion pesos (approximately 8.9 billion dollars), with 375 billion pesos corresponding to common shares and the remaining 125 billion pesos corresponding to preferred shares. The initial capitalization of the MIC will come from the National Government, the Land Bank of the Philippines, and the Development Bank of the Philippines.

The creation of the MIF is expected to stimulate the Philippines' economy by leveraging a small fraction of the country's considerable but underutilized investable funds from government financial institutions (GFIs). This will open up opportunities for local and foreign capital to directly participate in ventures, providing a credible and attractive platform for large global funds and other sovereign wealth funds to enter the Philippines. The MIF will also support the government's economic goals, as outlined in the Medium-Term Fiscal Framework, the eight-point Socioeconomic Agenda, and the Philippine Development Plan.

The MIF has two main objectives: a development or strategic objective and a commercial objective. The development objective aims to promote sustainable economic development by making strategic and profitable investments in key sectors, including infrastructure, countryside development, employment-generating projects, and emerging megatrends such as digitalization, ESG (environment, social, and governance), and healthcare. The commercial objective focuses on obtaining optimal absolute returns and achievable financial gains on its investments, satisfying requirements for liquidity, safety, security, and yield to ensure profitability.

The Fund will be managed by the Maharlika Investment Corporation

The Maharlika Investment Fund (MIF), also known as the Maharlika Wealth Fund (MWF), is the Philippines' first sovereign wealth fund. It is designed to advance the Philippines' long-term development goals and accelerate the country's growth by optimizing the use of government financial assets and promoting their intergenerational management. The MIF will be managed by the Maharlika Investment Corporation (MIC), which will act as the sole vehicle for mobilizing and utilizing the fund.

The MIC will have an authorized capital stock of 500 billion pesos (approximately 8.9 billion dollars), with 375 billion pesos in common shares available for subscription by the National Government, its agencies, Government-Owned and Controlled Corporations (GOCCs), or Government Financial Institutions (GFIs). The remaining 125 billion pesos in capital will correspond to preferred shares available for subscription by the National Government, its agencies, GOCCs, GFIs, and reputable private financial institutions and corporations. The MIF will be allocated across a variety of assets, including foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate, and infrastructure projects.

The MIC is mandated to implement sound and credible investment strategies, taking into account expected returns, risk tolerance, and financial and commercial viability and sustainability. The investment strategies will be subject to periodic review and stringent performance benchmarks. The MIC is also required to adopt sound and credible risk management strategies to ensure prudent management of the fund.

The MIC will be governed by a Board of Directors, composed of nine members: the Secretary of Finance as Chairperson, the CEO of the MIC, the President and CEO of the Land Bank of the Philippines, the President and CEO of the Development Bank of the Philippines, two Regular Directors, and three Independent Directors from the private sector. The Board of Directors will be guided by an Advisory Body, composed of the Secretaries of the Department of Budget and Management (DBM) and National Economic and Development Authority (NEDA), and the Treasurer of the Philippines, who will provide advice on investment and risk management.

The MIC is expected to be fully operational by the end of 2024 and will play a crucial role in managing the MIF, identifying financially and commercially viable infrastructure projects, and formulating investment strategies covering emerging megatrends such as environment, social and governance (ESG), digitalization, and healthcare.

The Fund will be governed by a Board of Directors with nine members

The Maharlika Investment Fund (MIF), also known as the Maharlika Wealth Fund (MWF), is the Philippines' first sovereign wealth fund. It is designed to advance the Philippines' long-term development goals and stimulate the economy by investing in a wide range of assets, including foreign currencies, fixed-income instruments, corporate bonds, commercial real estate, and infrastructure projects. The Fund will be managed by the Maharlika Investment Corporation (MIC), which will be governed by a Board of Directors with nine members.

The nine-member Board of Directors will consist of the following:

• Secretary of Finance as Chairperson
• Chief Executive Officer (CEO) of the MIC as Vice-Chairperson
• President and CEO of the Land Bank of the Philippines
• President and CEO of the Development Bank of the Philippines (DBP)
• Two Regular Directors with a three-year term
• Three Independent Directors from the private sector with a one-year term, which can be extended up to a maximum of nine years

The CEO, Regular Directors, and Independent Directors will be appointed by the President upon the recommendation of the Advisory Body, which is composed of the Budget Secretary, the National Economic and Development Authority Secretary, and the National Treasurer.

The role of the Board of Directors is to govern and oversee the management and operations of the MIC, ensuring that the Fund is managed effectively and in alignment with its objectives. They will be responsible for approving investment strategies, managing risks, ensuring compliance with regulations, and making decisions on capital allocation and investment choices.

The Board of Directors will work closely with the Advisory Body, which will provide guidance and expertise in investment and risk management. Additionally, a Risk Management Committee and an Audit Committee will be established to support the Board in managing risks and ensuring transparency and accountability in the Fund's operations.

The MIC, governed by the Board of Directors, will be responsible for identifying viable infrastructure projects, formulating investment strategies, and making investment decisions to optimize the use of government financial assets and promote intergenerational management.

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