More than two years since its contentious birth, the Maharlika Investment Fund (MIF) has failed as an economic savior and succeeded only as a lesson in misguided priorities.

Conceived as a sovereign wealth fund but operating without the essential “surplus” wealth that defines such entities, the MIF has always been a risky experiment. Its slow and questionable start only confirms initial fears that this is a fund in search of a purpose, using capital taken from more urgent national needs.

The fundamental flaw of the MIF, which was signed into law as Republic Act 11954 by President Ferdinand R. Marcos Jr. on 18 July 2023, lies in its very foundation. Unlike Norway’s model, which is funded by genuine excess revenue from natural resources, the Philippines had to scrape together its seed capital.

The P50 billion from the national government, P50 billion from the Land Bank of the Philippines, and P25 billion from the Development Bank of the Philippines were not “surplus” funds in the true sense. These were resources that were diverted from their primary mandates — to provide crucial financing for farmers, fisherfolk, small businesses, and rural cooperatives.

In essence, the MIF was not created from newfound wealth but was capitalized by reallocating funds meant for grassroots economic development. This immediately set a troubling precedent, prioritizing high-finance speculation over direct, impactful support for the sectors that underpin our economy.

This misallocation of the P125-billion capital is starkly evident in the MIF’s limited investment portfolio. Its only two major moves are deeply problematic — a P19.5-billion acquisition of a 20-percent stake in the National Grid Corporation of the Philippines (NGCP) to gain more government influence against its Chinese part-owner (State Grid Corporation of China), and a P4.4-billion bridge loan for Makilala Mining Company to fund feasibility and engineering studies for a copper and gold mining project in Cordillera.

Evidently, the NGCP investment is particularly ironic. It essentially used public money to buy back a strategic asset that should, arguably, remain under full state control.

For many, it was a circular transaction that created the illusion of nationalistic action while failing to address the root of the problem. The mining investment, while potentially profitable, raised environmental and social concerns, especially in the ecologically sensitive Cordillera region.

Apparently, it was said to be a shift towards extractive industries at a time when global trends and national needs are pushing for sustainable and human-centric development.

The critical question remains: are these the best possible uses for billions of pesos in public capital? At a time when the country faces a crisis in education, with overcrowded classrooms and underpaid teachers, and a healthcare system straining to serve the masses, investing in “human capital” would yield far greater and more equitable long-term returns for the economy. A healthy, educated populace is the most reliable foundation for sustainable growth, far more than the speculative returns of a state-run investment fund.

More than two years on, the Maharlika Fund’s performance has been underwhelming. It has not sparked an economic game-change nor delivered tangible benefits to the average Filipino. Instead, it has validated concerns that it is an instrument of financial engineering that diverts precious resources from where they are most needed.

Until there is a clear, transparent, and socially responsible strategy that genuinely creates new wealth rather than just moving it around, the Maharlika Fund will remain a costly answer to a question Filipinos are now asking.