Diokno allays fears MIF may lead to bank collapse

The Department of Finance (DOF) allayed fears yesterday that the proposed Maharlika Investment Fund (MIF) would bankrupt banking institutions should it fail.

Senator Aquilino Pimentel III in a TV interview said the failure of the MIF could lead to the possible collapse of banks tapped to become its fund source.

This includes the Land Bank of the Philippines and the Development Bank of the Philippines (DBP), he said, which were eyed to contribute P50 billion and P25 billion to it, respectively, based on the version of the MIF bill filed in the Senate.

The Bangko Sentral ng Pilipinas will remit 100 percent of its dividends for two years to the fund.

But Finance Secretary Benjamin Diokno said the premise “is just panic.”

“Ini-invest lang naman niya is three percent of its total investable fund. Actually, ang investable fund niya is more than P1 trillion,” Diokno told reporters in a chance interview.

“Mga P50 billion lang ikocontribute niya and it will probably get higher returns compare sa current fund nila. ‘Yun lang naman ‘yun,” he said.

When asked if there was no need to worry about the issue, the Finance chief said, “There is no basis for that.”

Diokno also responded to the Senate’s criticism of its version of the MIF bill, saying there was a “backdoor provision” allowing government-owned and controlled corporations (GOCCs) — such as the Government Service Insurance System (GSIS) and the Social Security System (SSS) — to invest in it.

She said these GOCCs might “gamble” their funds in the MIF, most especially when board members of such agencies are appointed by the President.

Diokno said the GSIS and the SSS would make their decisions based on the risks involved.

“Kaya nga may mga board eh. While they are presidential appointees, they act in the best interest of the company katulad ng SSS. Ang trabaho niya is to make sure na ‘yung kino-contribute niya sa pension system ay napapalago niya,” he said.

“So mayroon kang options, A, B, C, D, E ganon… Sasabihin mo ang pera ko kino-contribute ko sa ‘yo, sa A,” he added.

The official clarified while not saying it was okay, “We do not want to preclude the board.”

“That is the board’s decision,” he added.

President Ferdinand Marcos, Jr. earlier certified as urgent the sovereign wealth fund’s version in the Upper Chamber.

In a letter to the Senate dated May 22, Marcos cited a “compelling need for a sustainable national investment fund” amid “the downgrade of the global growth projection.”

The Senate earlier criticized the inclusion of Land Bank and DBP as funding sources for Maharlika, saying it would be better for those banks to lend to the agriculture sector instead.