MANILA, Philippines – President Ferdinand Marcos Jr. and his economic team painted a “healthy and robust” business landscape in the Philippines as he courted Saudi Arabian business leaders into investing in the country’s newly established sovereign wealth fund.

“At the forefront of these opportunities is the recently launched Maharlika Investment Fund (MIF), the Philippines’ first-ever sovereign investment fund designed to drive long-term economic development through increased investments in high-impact sectors,” Marcos said on Thursday, October 19, during a roundtable meeting on the sidelines of the inaugural summit between the Association of Southeast Asian Nations (ASEAN) and the Gulf Cooperation Council (GCC).

“We look forward to benefiting not just from Saudi investments, but the Kingdom’s extensive experience in managing such funds,” he added. “Our financial and banking sectors are healthy and robust.”

Play Video

Saudi Arabia’s Public Investment Fund (PIF) is among the world’s largest, with assets totaling more than $700 billion.

Marcos brought with him in the ASEAN-GCC Summit his trade and finance secretaries, who also hyped the Maharlika fund and other opportunities in the Philippines to business leaders in attendance.

“Investments in Maharlika are intended to quicken the country’s 197 infrastructure flagship projects worth $153 billion. The infrastructure flagship projects focus on upgrading physical and digital connectivity, transport, agriculture, health, energy, water, and climate resilience. These projects offer high rates of return and large socioeconomic impact,” Finance Secretary Benjamin Diokno said.

“The Philippines is at a turning point of a transformative journey. As we champion economic inclusivity and propel ourselves forward, we are molding the Philippines into a prime investment destination,” Trade Secretary Alfredo Pascual said.

In an interview with the media on the sidelines of the ASEAN-GCC Summit on Friday, September 19, Marcos said that the MIF drew positive response from other Gulf states as well.

“We have already started, we detailed talks with their PIF, which is the equivalent here in Saudi Arabia. It is their investment fund and how we can do it, how we can work together,” he said. “And it is not only Saudi Arabia, it is also other Gulf countries who have expressed an interest.”

Persistent concerns

At home, opposition to the Maharlika fund persists, as critics worry over economic and corruption risks.

Play Video

Diokno told Saudi Arabia’s business community that safeguarding their investments is a top priority.

“Financial reporting shall be in accordance with relevant international financing reporting standards and principles. There will be three layers of audit based on law – by an internal auditor, a third-party external auditor, and a supreme audit agency independent of the government,” he said.

Also present in the roundtable discussion were Saudi Arabia’s investment minister Khalid Al-Falih and representatives from the PIF, Hassana Investment Company, Saudi Arabian Investment Company, and the Saudi Fund for Development.

Separate press releases from the Presidential Communications Office and the office of Speaker Martin Romualdez – who is part of the Philippine delegation to the summit – said that PIF executive general manager Mulhan Albakree, as well as Bandar Al Hamali, CEO of leading Saudi Arabian investment company Jada, have expressed interest in the MIF.

“We are pleased with the success we have seen so far, and given the extensive reforms being driven under your Philippine Development Plan, we are very excited about the future of partnership between our two nations,” Al-Falih said.

Maharlika fund’s suspension

Marcos has said the MIF would be operational before the end of the year.

In his departure speech before he flew to Riyadh on Thursday, Marcos said he was alarmed by reports that his administration had put the Maharlika Fund on hold, even though his administration actually did.

A day earlier, his Executive Secretary Lucas Bersamin confirmed the issuance of an October 12 memo directing government agencies to suspend the MIF’s implementing rules and regulations pending further refinement.

Play Video

Sources have told Rappler the government put the brakes on the MIF so Marcos himself could look into the selection process of applicants and nominees of the Maharlika Investment Corporation (MIC), the state-run company that would manage the funds.

Under current rules, Marcos isn’t the one responsible for coming up with a list of names that would be part of the MIC board. – Rappler.com

[In This Economy] Is Marcos slamming the brakes on Maharlika for the right reasons?