The Philippine Stock Exchange (PSE) said the establishment of a sovereign wealth fund will benefit the capital market.
“Since the MIF (Maharlika Investment Fund) seeks to attract and invest capital for big-ticket infrastructure projects, sustainable green and blue infrastructures and countryside development, we believe these investments will create a multiplier effect that would attract more fund-raising activities and portfolio investments and in turn contribute to the growth and development of our capital markets,” the PSE said in a statement supporting House Bill 6608 establishing the MIF.
PSE said the MIF is in line with the stock exchange’s “primary mission to facilitate the flow of capital into more productive and beneficial channels and as a result contribute to efficient capital formation for the country.”
Voting 279-6 with no abstention, the House of Representatives last week approved HB 6608 on third reading, hours after they approved the same on second reading. All who voted in favor of the bill were officially named as co-authors.
The President’s certification of the bill allowed congressmen to approve the measure on second and third reading within the same day and dispense with the constitutional provision that no bill shall become a law unless it has passed three readings on separate days, particularly three days in between the second and third readings.
The bill lists the Land Bank of the Philippines, Development Bank of the Philippines (DBP), Philippine Gaming and Amusement Corp. (Pagcor), and Bangko Sentral ng Pilipinas (BSP) as MIF contributors.
Their initial contributions are P50 billion for Land Bank, P25 billion for and DBP, 100 percent of dividends the BSP will give the national government. Pagcor’s share will be 10 percent of its gross gaming revenues.
Meanwhile, Danilo Fausto, president of the Philippine Chamber of Agriculture and Food Inc. (PCAFI) urged
the government should invest a portion of the MIF in agriculture value chain if it would tap money from Landbank and DBP, the sector’s main lenders.
“I do not see in the Maharlika Investment Fund anything on the agricultural sector. (It should be) mandatory in the law that a portion of that fund should be invested in agricultural value chain,” Fausto told reporters last week.
Fausto said the MIF can be invested in cold storage facilities, processing, milling, drying and logistics operated by private sector cooperatives.
“We do not define agriculture as per production but it should involve the entire value process, value chain. We need storage facilities, we need logistics. That is what we need and that will make money. Now, you can leave the production side to the Landbank or the normal banking system…,” Fausto said.
The PCAFI leader at present, producers of onions for example, pay P7 per kilogram for cold storage for a six-month contract for 10 metric tons of produce or a total of P70,000.
