Sen. Sonny Angara —Senate PRIB
The government’s economic team on Wednesday assured the senators that the P75 billion in seed money that two state-owned banks had provided for the Maharlika Investment Fund (MIF) will not adversely affect their fiscal health.
Quizzed by Sen. Risa Hontiveros during the Senate budget deliberations, Sen. Juan Edgardo Angara said the funds that the Land Bank of the Philippines (Landbank) and the Development Bank of the Philippines (DBP) had released were well within the limit that the two financial institutions may invest.
He said the initial capital of P50 billion from Landbank and P25 billion from DBP was just 4 percent and 3 percent of their total net worth, respectively.
The amounts, he pointed out, satisfied the 25-percent investment threshold as mandated by Republic Act No. 11954, the law that created the country’s first sovereign wealth fund.
“Is it correct to say that the consequence of the transfer of P75 billion from the DBP and Landbank is a reduction of about P600 billion in the ability to lend of these two banks?” Hontiveros asked Angara.
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“Do we know if we might need to infuse equity into DBP and LandBank because of the possibility that this 25-percent limitation might already have been breached?” she said.
Angara, who was representing President Marcos’ economic managers in defending the P5.768-trillion national budget for 2024, said Landbank had P1.3 trillion in investible funds, while the DBP had P850 billion for the said purpose.
“I think the P75 billion that the law requires of them is on the prudent side,” Angara said.
When asked by Hontiveros if there was any reason to worry about the two state banks’ liquidity and financial capabilities, he replied: “None, your honor.”
She then asked the Department of Finance, the DBP and Landbank to submit a technical report showing that the amounts that the banks infused to the MIF were “idle or not generating good economic returns.”