Carpio: Maharlika Investment Fund will be a losing proposition

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Metro Manila (CNN Philippines, December 16) - Retired Supreme Court Senior Associate Justice Antonio Carpio on Friday warned that the proposed Maharlika Investment Fund (MIF), which has hurdled the House of Representatives, will be a losing proposition.

According to Carpio, the fund is expected to have an annual return of only 7% to 8%, but the interest on its debt-funded equity including its operating expenses will be 8.9%.

"On a national accounting basis, the MIF will result in an annual loss, because the total annual cost of putting up and operating the MIF is 8.9%...while the MIF will earn annually only from 7% to 8%," Carpio said during a media forum.

The retired magistrate added that the MIF is being put up at the worst possible time.

He noted that the country's debt servicing for 2023 is projected at ₱1.6 trillion, or 29.8% of the national budget.

Carpio said it will be more prudent if the government will first reduce the debt-to-GDP ratio from the present 64% to the pre-pandemic level of 40% before thinking of putting up the fund.

He also emphasized that the MIF must always come from surplus revenues of the national government so that the cost of the equity of the fund to Filipinos will be zero.