Diokno says Maharlika fund to boost infra spending
MANILA, Philippines — Finance Secretary Benjamin Diokno remains optimistic that the proposed Maharlika Investment Fund (MIF) will have a positive impact on the country’s infrastructure spending, which the national government eyes to accelerate via the "Build Better More" program.
With MIF, economic managers said infrastructure spending could possibly be ramped up to 10-12% of gross domestic product (GDP) from the current spending allocation of 5-6%.
“We have identified something like 194 projects. These are feasibility studies, some have begun engineering, so with additional funding, we can easily implement many of these projects,” Diokno said on Friday during the Department of Development Budget Coordination Committee (DBCC) medium-term fiscal program briefing.
National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan also noted that infrastructure investments would be favorable as the sources of economic growth mostly come from domestic demand.
“We have the fiscal space to get these drivers of growth, particularly infrastructure,” Balisacan said.
Citing former President Rodrigo Duterte’s the “Build, Build, Build” program, Diokno touted the multiplier effects from the infrastructure build-up.
“We did not spend enough during the last 50 years prior to the Duterte administration. We only spent 2% of GDP for infrastructure, that’s why we suffer in comparison to our neighbors,” Diokno said.
In 2021, infrastructure spending was equivalent to 5.3% of the GDP, compared to 3% when Duterte’s term started.
Despite the issues surrounding MIF, such as the lack of surplus revenues to afford such investments, Diokno asserted that funding the proposed sovereign wealth fund would have no negative impact on the national budget.
He highlighted that the P50 billion contribution from the Bangko Sentral ng Pilipinas (BSP) will come from dividends, while the contribution of the Land Bank of the Philippines (LBDP) will be a “smart investment”.
In a strongly-worded paper that outright calls the proposed MIF “defective” and violative of economic principles, faculty members of the University of the Philippines School of Economics earlier this week have expressed their reservations with the Marcos administration's pet measure.
“We find that the MIF violates fundamental principles of economics and finance and poses serious risks to the economy and the public sector — notwithstanding its proponents’ good intentions,” the UP professors said.
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