ADB, IMF, US-based think tank back Maharlika fund – budget chief

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Metro Manila (CNN Philippines, December 14) — The proposed establishment of the Maharlika Investment Fund (MIF) was backed by the Asian Development Bank (ADB), International Monetary Fund (IMF), and US-based think tank Milken Institute, the country's budget chief said.

Budget Secretary Amenah Pangandaman said during the Kapihan sa Manila Bay forum on Wednesday that discussions about the proposal began during the Duterte administration.

Critics wary of the risks to public funds, including from corruption, are opposing the proposed fund.

"During the pandemic, it was also the same time when INA (Indonesia Investment Authority), the sovereign wealth fund of Indonesia, was established. It was all over the news during that time. And then [Finance] Secretary Ben Diokno, BSP (Bangko Sentral ng Pilipinas) governor then, asked us to review and check if the BSP can establish its own sovereign wealth fund," Pangandaman said.

Diokno's proposal secured the ADB and IMF's support as the Philippines "had a surplus in our reserves" that was "more than enough," she said.

However, the BSP must not be used as a primary vehicle for the investment trust, she added.

"Both development partners said it's okay, but not from the central bank because it's not part of its mandate. It's possible, but you [the government] need to revise the mandate and the charter of the BSP," Pangandaman said.

The budget secretary also said Milken Institute had been tapped during the technical working group meeting, including for the recommendation about the type of sovereign wealth fund ideal for the Philippines.

"They will release soon a report, and I think the report will say that the time is now. We don't have to wait to start and create our own sovereign wealth fund," she said. "There are several types, some are using it for their pension system, others are using it for their natural resources. Ours is for development, to develop and to fund at least our infrastructure projects and programs."

The government also discussed the proposal with the World Bank, she said.

Pangandaman added the planned MIF is undergoing "a thorough legislative process with public consultations."