‘Sovereign wealth fund must benefit PHL agri’

THE Philippine Chamber of Agriculture and Food Inc. (PCAFI) is urging lawmakers to invest a portion of the Maharlika Investment Fund (MIF) in projects that would improve agricultural productivity, such as the construction of postharvest facilities and warehouses.

PCAFI President Danilo V. Fausto said the MIF should be invested in agriculture since part of its initial capital would be drawn from the funds of the Land Bank of the Philippines (Landbank).

Fausto noted that Landbank is considered as the country’s state-run agricultural bank focusing on the needs of Filipino farmers and fishermen.

“We demand that a portion of the Maharlika Investment Fund be invested in the agriculture sector. We do not see in the Maharlika Investment Fund anything [related to] the agricultural sector,” he told reporters in a recent interview.

“It should be mandatory in the law that a portion of that fund should go to the agricultural value chain.”

Fausto said the proponents of the MIF can consider using the capital of the proposed sovereign wealth fund for agricultural projects or use the revenues generated from initial investments.

What’s important, the PCAFI chief said, is that the government would invest in the agriculture sector to help improve domestic food productivity.

“If you put the investment in cold storage facilities, it will make money. Processing, milling, drying logistics, those will also make money as long as they are properly run and I suggest that they should not be run by the government but by the private sector,” he said.

“Any activity, investment or investible fund of Maharlika Investment Fund should go to agriculture. The share should be about 25 percent to 30 percent [of the fund] because you got the money from Landbank, thereby reducing the bank’s fund that should have gone to agriculture.”

Under House Bill 6608, which seeks to create the MIF, the Landbank will contribute P50 billion to the initial capitalization of the country’s proposed sovereign wealth fund.

The bill, which was approved on third and final reading by the House of Representatives last week, stipulated that the board of the Maharlika Investment Corp. shall determine the dividend policy of the MIF provided that at least 20 percent of the net profits will be remitted to the national government for social welfare projects.

Last week, President Ferdinand R. Marcos Jr. has certified as urgent a bill creating the country’s MIF following the recommendation of Finance Secretary Benjamin E. Diokno. (Related story: https://businessmirror.com. ph/2022/12/16/on-dioknos-bidpbbm-certifies-mif-urgent/).

Earlier, Budget Secretary Amenah F. Pangandaman disclosed that multilateral lending institutions and a United States-based think tank have thrown their support behind the establishment of the country’s own sovereign wealth fund.