House Speaker starts Maharlika promo blitz
MANILA, Philippines — Speaker Martin Romualdez assured Malaysians that they would be welcome to invest in the Maharlika Investment Fund (MIF) when President Ferdinand Marcos Jr. unveils the sovereign fund during his official visit to Kuala Lumpur starting July 25.
Romualdez will join the President’s delegation when he leaves for a two-day official visit to Malaysia a day after delivering his second State of the Nation Address.
Malaysia has had the most success with sovereign funds since its $18.6-billion Khazanah Nasional is now the third largest sovereign fund in Southeast Asia, next to Singapore and Brunei. Singapore’s GIC sovereign fund is the biggest in the world with more than $630 billion in assets under management. Brunei’s BIA fund is the region’s oldest and third most successful with about $73 billion in assets under management.
Khazanah Nasional has been around for 30 years, although its success has been overshadowed by the more recent notoriety of the 1Malaysia Development Berhad under jailed former Prime Minister Najib Razak.
Romualdez said it makes sense for any country looking to increase its capital to invest in another country posting high economic growth.
He noted that the Asian Development Bank has projected that the Philippine gross domestic product would likely grow by 6 percent this year and by 6.2 percent next year, the highest among Southeast Asian countries.
Romualdez stressed the importance of the MIF, pointing out, “While the Philippines can also offer investment opportunities, we see that the cost of debt has risen, making the need to explore other vehicles to attract equity financing, such as Maharlika Investment Corporation.”
Since other Southeast Asian economies have had decades of experience with sovereign funds, they would likely invest in MIF because it was “not only beneficial but necessary” since the country was a “growing economy.”
“This will be a very, very important vehicle to attract more resources and investments into the country, to supplement our resources that are provided for in the national budget for developmental initiatives, infrastructure, in the power and agriculture sectors,” he added.
The Speaker expressed bullishness on the prospects of the MIF as a financial vehicle, citing foreign interest in the fund, including from the Japan Bank for International Cooperation and Middle Eastern investors.
“I think Maharlika is starting with a more substantial seed capital and there’s already various commitments, I think it will be much larger than that,” the Speaker said, comparing it with Indonesia’s initial $1-billion seed capital, which later grew exponentially to around $230 billion in less than two years.
He was referring to Indonesia’s INA fund, which was established only in 2021, but has gained much investor interest because of its growth potential.