Diokno: BSP fund inclusion in Maharlika ‘not a threat’ to PH’s financial stability

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Metro Manila (CNN Philippines, June 2) — Finance Secretary Benjamin Diokno insisted Friday that the central bank’s contribution to the controversial Maharlika Investment Fund (MIF) will not hurt its mandate to ensure price and financial stability.

“BSP (Bangko Sentral ng Pilipinas) contribution to MIF is not a threat to financial stability,” Diokno, who also served as the BSP governor under the Duterte administration, said in a statement.

He was reacting to former BSP Deputy Governor Diwa Guinigundo’s statement during an interview with CNN Philippines’ The Source on Wednesday, warning that the BSP’s participation may weaken its capacity to perform its duties.

READ: BSP will struggle with its mandate if dividends are allocated to Maharlika Fund, ex-official says

But Diokno maintained that the BSP’s current financial position is “much better than when it’s revised charter was being deliberated upon.”

“In addition, the BSP was granted additional tools to conduct its primary mandates,” he said.

He even noted that during the peak of the COVID-19 pandemic, the BSP provided an interest-free loan amounting to ₱540 billion to the national government.

“[That was] to help the country during its economic distress. That’s how good, BSP’s finances are,” he said.

The Maharlika bill is now awaiting the signature of President Ferdinand Marcos Jr. after the House of Representatives adopted the Senate version of the measure.

Under the proposed bill, the Maharlika Investment Corporation (MIC) will get its initial capital from the following:

— Land Bank of the Philippines (₱50 billion)

— Development Bank of the Philippines (₱25 billion)

— National government (₱50 billion)

The contributions from the government would come from the BSP, Philippine Amusement and Gaming Corporation or Pagcor, properties, real and personal, identified by the Department of Finance, and other sources.

“The contributions being asked from BSP for the first two years of the MIF, for a maximum of ₱50 billion pesos, are dividends declared in favor of the national government. That’s the net profit of BSP and the NG decides how to use it. I estimate that BSP’s dividend for the NG in 2022 would be in the neighborhood of P30 billion,” Diokno said.