MIF detractors foiled

Based on the new formula, the proposed MIF Corp., which will oversee the MIF, will cease to exist as a GOCC after it becomes a publicly listed company.

Critics of the Maharlika Investment Fund were made to look like fools after President Ferdinand “Bongbong” Marcos Jr. presented a “reengineered” sovereign wealth fund at the World Economic Forum in Davos, Switzerland.

The new features of the MIF include securitization and use of the stock market that will raise an estimated P2 trillion for the fund, based on the estimate of Albay Rep. Joey Salceda.

A group of experts came together after Christmas to firm up a new configuration that will build up the MILF seed capital.

“Right after Christmas, we were commissioned, me and three others, to rewrite, essentially re-engineer the MIF. Basically, it will be through the securitization of dividends,” said Salceda, one of the investment vehicle’s prime movers.

Among the key revisions is the exclusion of direct assets infusion from the Development Bank of the Philippines and other state-owned financial institutions.

Some P44.3 billion of annual dividends of government-owned and controlled corporations or GOCCs, which Salceda said are the “real surpluses,” will instead be securitized,
The securitization of GOCCs’ dividends is estimated to raise P765.96 billion in 20 years while the proposed initial public offering for the MIF can easily draw P1.2 trillion.

The MIF revamp stemmed from the administration’s goal of promoting a viably successful investment fund in Davos where American financial management firm Morgan Stanley and other investment banks were enthralled.

Based on the new formula, the proposed MIF Corp., which will oversee the MIF, will cease to exist as a GOCC after it becomes a publicly listed company.

It will be basically private with the government owning only less than 50 percent, Salceda added.

The proceeds can then be invested in projects with huge returns on equity such as the construction of dams. The last time the country built a dam was 32 years ago in San Roque, Pangasinan.

Under a new concept, the sovereign wealth fund evolves into a development fund that will attract local and foreign investments. Though private-sector-driven, the government will continue to be a source of guidance.

With the President’s approval of the new MIF concept, its final form would be just a matter of details.

The potshots of detractors have become moot and academic because the MIF has changed drastically since its soft launch at the WEF.

One of the more vicious detractors said the revamped makeup of the fund warrants the recall of the House measure.

The adjustments, he said, were made to accommodate the clamor of many international funds that they are given greater room to participate.

“That is precisely because they found the idea viable, to begin with,” Salceda added.

Those who want the initiative to fail run contrary to those working fervently to make it succeed, thus the poor appreciation of the revisions introduced to the fund.

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