ESTOMAGO, ANGELO E.

BSED-MATH/ 1284/ MSAT-1

Maharlika Investment Fund: Good Proposition or Not?

When we talk about investment, we all know that it is all about the act or activity of investing
money in order to make or obtain material goods. Well, Philippine President Ferdinand Marcos
Jr. has backed the creation of a sovereign wealth fund, known as the Maharlika Investment Fund
(MIF), to raise money and direct investments toward expensive infrastructure projects.
According to Department of Budget and Management, MIF is an autonomous wealth fund which
will be used by the government to invest in a wide range of outlets similar as foreign currencies,
fixed income instruments, domestic and foreign commercial bonds, marketable real estate, and
structure systems among others. The whole world has been using investment funds for a long
time. In addition, based on what I have read on the article entitled the "World Economic
Forum", there are 98 sovereign wealth funds with a combined asset value of 7.94 trillion dollars
that are utilized by 70 nations globally. There are a lot of countries that have the largest
sovereign wealth funds. First is the France which has 1.5 trillion dollars, then followed by the
Norway and China that have 1.2 trillion dollars each, and lastly the UAE and Kuwait that have
708 billion dollars each. Investment fund is common used by the countries that have budgetary
surplus, that sadly we do not have, and countries that have no international death that we
particularly have. Why? It is just because the countries that involved in this kind of investment
put their surplus money there, in order to have more funds. It is not the money of private
cooperatives, yet it is the money or funds of a country. Yes, many countries excel or have been
improved with this kind of investment, but sad to know that there are also countries that have
lost a lot of money with the said investment. Like the Norway, that loses 10 trillion pesos in the
first half of 2022, the South Korea that loses 1.6 trillion pesos in the first 8 months of 2022, and
the Malaysia that loses 11.8 billion dollars and 4.5 billion dollars that have being stolen. In our
country, our investment is said to be Maharlika Investment Fund (MIF). According to congress,
the MIF idea was developed because it did not want to impose new taxes that would place an
additional burden on ordinary Filipinos. The legislature opted to use surplus cash rather taxes to
fund long term economic development initiatives and programs. According to Department of
Budget and Management, the MIF was first proposed in house bill 6398, also known as the
Maharlika Investment Fund (MIF) Act. And, based on the house bill no. 6398, the four
institutions promised to give 250 billion pesos as a start up investment for the MIF. The 125
billion pesos will be from GSIS, 50 billion pesos from the Land Bank of the Philippines, another
50 billion pesos from SSS, and lastly from DBP which is 25 billion pesos which can result for a
total start up investment of 250 billion pesos for the MIF. However based on the article entitled
"Philippine News Agency", on last December 15, 2022, the House of Representatives passed
house bill 6608 or the proposed Maharlika Investment Fund Act on the third and final reading
and was transmitted to the senate on December 19, 2022 The MIF has passed the first obstacle
in getting approved, but it still generates a lot of discussion among different industries. On the
other hand, this is beneficial because it will guarantee that the entire nation approves of the
finished product. The plan merits serious examination because it is an investment in the future
of the country and another mechanism that would pave the way for a better future for all
Filipinos in the coming years. The Maharlika fund in particular will be used by the government to
invest in significant markets such as foreign exchange, local and foreign corporate bonds,
commercial real estate, and support the country's main goals. It is modeled after the Sovereign
Wealth Funds (SWFs) of large number of other countries such as Singapore, China, Hong Kong,
South Korea, and Malaysia. Based on the article that I have read entitled "The Sovereign Wealth
funds of Singapore", Temasek Holdings (TSK) and the Government Investment Corporation (GIC)
are the oldest and largest sovereign wealth funds of Singapore. Both funds are evidence of
Singapore's lengthy history of good macroeconomic fundamentals and strict fiscal control. The
operational characteristics and governance frameworks of the two funds are significantly
different. However, Chen, J. (2022), states that China's sovereign wealth fund is called China
Investment Corporation (CIC) and was created on 2007 to diversify the nation's holdings of
foreign currency. At the same manner, Hong Kong have also sovereign wealth fund which is the
Hong Kong Monetary Authority (HKMA) that is suitable to manage the exchange fund and
helping to maintain Hong Kong's status as an transnational financial center. Anyway, according
to the International Forum of Sovereign Wealth Funds, the Korea Investment Corporation (KIC),
is the sovereign wealth fund in South Korea, and was established in 2005 to manage public
monies entrusted by the country's government and central bank. It also invests in a variety of
overseas financial assets. While in Malaysia their sovereign wealth fund is called Khazanah
National Berhad and was proposed under the Companies Act 1965 on September 1993, which is
a public limited company and start their operations a year later. As has been demonstrated, the
sovereign wealth fund of each country is used to collectively invest in expensive and large
projects and it also help to improve the flow of economy. Well, from my perspective, having a
sovereign wealth fund which is the Maharlika Investment Fund here in our country can really
benefit to us. It has been said that doing so, can aid in our nation's development and provide a
budget for costly initiatives that a big number of people can benefit from. But everything in this
world has a potential to result in both good and bad things. What would happen if the funds
invested in that specific SWF were corrupted? Because as we all know, corruption is rife in our
nation. It is not only a little or simple money, it is a very large amount of money of a country and
it is very prone and have a big possibility to be corrupted. And according to the research I did,
not every country that participated in SWSs was successful. In fact, several of them lost a
significant amount of money or capital in their investments. Yes, Maharlika Investment Fund is
essential to the people of the Philippines because it is a source of investment capital for
businesses and projects that will create jobs and spur economic growth. It also provides
financing for social welfare and infrastructure projects. But, we should be aware that making or
joining this investment is similar to playing the lottery, your chances of winning or losing rely on
your strategy and other factors. To wrap things up, I can say that Maharlika Investment Fund
can benefit to us and to our country, but we need also to have a very serious decision before we
will enter in this kind of investment. Always think wisely before you will do any actions in order
for you to get a better outcome.
 REFERENCES

1. Philippines to Establish Sovereign Wealth Fund. Koty, AC (2022, December 21).

www.aseanbriefing.com

https://www.aseanbriefing.com/news/philippines-to-establish-sovereign-wealth-fund/

2 Maharlika Wealth Fund, An Investment Vehicle and Economic Driver-Economic Team. (2022,
December 5) Www.dbm.gov.ph.

https://www.dbm.gov.ph/index.php/secretary-s-corner/press-releases/list-of-press-releases/
2511-maharlika-wealth-fund-an-investment-vehicle-and-economic-driver-economic-team

3. Maharlika Fund Will Ensure a Better Future for All Filipinos. Cordevilla, E. (2023, February 1)
www.pna gov ph

https://www.pna.gov.ph/opinion/pieces/625-maharlika-fund-will-ensure-a-better-future-for-all-
filipinos

4. China Investment Corporation (CIC) Definition. Chen J (2022, November 25).

www.investopedia.com

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.investopedia.com/
terms/c/china-inv-corp.asp%23:~:text%3DKey%2520Takeaways,major%2520investments
%2520around%2520the%2520globe.&ved=2ahUKEwjswfSR5a39AhWVBogKHRj-
Bn0QFnoECAkQBQ&usg=AOvVaw0wiEDQp3cM_qOuhqxoutQl

5. Hong Kong Monetary Authority (HKMA) (2023) Www.hkma.gov.hk

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.hkma.gov.hk/eng/
about-us/the-hkma/
&ved=2ahUKEwjW9pSD5639AhXH4mEKHSIcAHcQFnoECA8QBQ&usg=AOvVaw3Q-
avDuwjKiaSsjEYHzL9p

6. Korea Investment Corporation (2023), Www.ifswf.org

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.ifswf.org/member-
profiles/korea-investment-
corporation&ved=2ahUKEwivtIPN6a39AhUCRd4KHYc7ChAQFnoECA0QAQ&usg=AOvVaw05XdIJY
hIjvTiAoehx0OzH

7. Khazanah Nasional Berhad (2023) Www.khazanah com

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.khazanah.com.my/
&ved=2ahUKEwiwlYSRibP9AhUOslYBHVXbAsgQFnoECAgQAQ&usg=AOvVaw0EBnPxqPPhDQS9ir
FD2HZs

8. The World's Biggest Sovereign Wealth Funds -In One Chart (2021). www.weforum.org

https://www.weforum.org/agenda/2021/02/biggest-sovereign-wealth-funds-world-norway-
china-money/