THE Maharlika Investment Fund (MIF) is expected to generate 100,000 direct and indirect jobs as its initial capitalization becomes fully paid in over the first 10 years of operations, the Department of Finance (DoF) said.
The MIF is also expected to contribute 0.07 percentage point (ppt) to gross domestic product (GDP) each year over the same period, the DoF said, also citing data from the National Economic and Development Authority (NEDA).
“Due to spillover effects, the value added generated through investment activities in the first 10 years of the Fund is expected to still contribute 0.01 ppt annually to growth over the next 11-20 years,” it added.
The sovereign wealth fund will be managed by the Maharlika Investment Corp. (MIC), which will have authorized capital stock of P500 billion.
The MIC’s initial P125-billion funding will come from the National Government (P50 billion), the Land Bank of the Philippines (P50 billion) and Development Bank of the Philippines (P25 billion).
Under a scenario in which the MIF is not established and the government keeps the P125 billion, the retained initial capitalization is expected to contribute 0.06 ppt to growth.
“There are no spillover effects expected in this scenario,” the DoF added.
A further scenario has the MIF generating 0.2 ppt in GDP growth annually if “in addition to co-investments generated with other parties, the P500-billion authorized capital stock of the corporation can be fully paid in over the course of the first 10 years of operations.”
“Job creation, both direct and indirect, is projected at 350,000,” it added.
Spillover effects from this scenario are also expected to contribute 0.05 ppt annually to growth over the next 11 to 20 years.
“NEDA also approximates when the impact of the investments in the following will be felt in the capital markets (in the) first few years (and) sectoral investments (in) five to seven years,” it added.
Meanwhile, Finance Secretary Benjamin E. Diokno clarified that the president and chief executive officer (CEO) of the Maharlika Investment Corp. (MIC) needs to be Filipino.
“I know the head of the MIC should be Pinoy. But independent directors (can be foreigners),” he said.
The implementing rules and regulations (IRR) of the Maharlika law do not explicitly state that the MIC president and CEO should be Filipino.
The MIC president and CEO is only required to hold an advanced degree (MBA, MA, MSc, PhD) in finance, economics, business administration, or any related field from a reputable university.
It also requires a minimum of 10 years in a senior leadership role in a “reputable financial institution or public or private sector organization.”
On the other hand, regular directors must be Filipino citizens and at least 35 years old.
Regular and independent directors are also both required to have a master’s degree in finance, economics, business administration and have at least 10 years’ experience in finance, investment, economics, business, or any related field.
The Bureau of the Treasury has started accepting nominations and applications for the president and CEO, independent directors, and regular directors.
The deadline for nominations and applications is on Sept. 27. — Luisa Maria Jacinta C. Jocson