Inquirer report reveals why foreign investors are wary of Maharlika fund
CHEERS TO the Philippine Daily Inquirer for a report that called attention to key issues surrounding the controversial Maharlika Investment Fund (MIF). The Inquirer picked up the insights of an economist who pointed out that despite efforts to promote the fund, unanswered questions around transparency and “investor safeguards,” to cite two, are keeping foreign investors at bay.
What’s the Story?
Since it was first proposed in November 2022 by House Speaker Martin Romualdez, President Ferdinand Marcos Jr.’s cousin, and Representative Sandro Marcos, the President’s son, the contentious law creating the country’s first sovereign wealth fund was enacted in just nine months. This despite public outcry and opposition from legislators, economic experts, and the business sector.
The Implementing Rules and Regulations of the law were released in August this year. The MIF advisory body, composed of the budget secretary, the director general of the National Economic Development Agency and the national treasurer, is preparing the list of nominees to run the Maharlika Investment Corporation. Finance secretary Benjamin Diokno announced in a media briefing that its investment activities would begin in the first quarter of 2024.
President Marcos has touted his numerous overseas trips as opportunities to promote the MIF to encourage foreigners to invest. And yet, an informed source has revealed that investors still need to know more about the fund.
What the Report Got Right
Inquirer’s September 28 report by Ronnel Domingo focused on the points and insights of Frederic Neumann, chief economist in Asia of the global financial institution HSBC. Neumann said in a briefing that the MIF is not as widely discussed overseas as it is locally. While the administration’s “international roadshow” has been “very helpful overall,” investors still need more information about how it works.
Questions on transparency, the fund’s “institutional setup,” and “investor safeguards” have yet to be answered if the government hopes to spark genuine interest from foreign investors, he said. However, he added that these questions would best be answered in an “ongoing process” — meaning “investors would learn about the MIF through its actual operation.”
In other words, so far, foreign investors are not convinced about the prospects of the MIF.
Why Is This Important?
Because the MIF is aimed mainly at foreign investors, it is necessary to hear what foreign investors have to say to provide perspective on government claims. The Inquirer’s report pointed out what is lacking in the establishment of the MIF, as expressed by someone dealing in foreign investments globally.
As critics have said, the MIF is complicated. The lack of transparency and safeguards are credible concerns, given the history of corrupt practices.
The article also reflects the ongoing questions about the President’s performance. Having claimed that he uses his frequent trips to promote his pet project, he has been shown up as failing to convince the international community about its soundness. Right off, promoting the MIF can only do so much. Perhaps those investing need to see whether the administration can actually deliver what it claims through actual operations.
Marcos could try to do this without having to leave the country.