MALACAÑANG on Wednesday defended the Maharlika Investment Fund (MIF) as an effective government investment portfolio, saying its mandate differs from that of state-owned banks tasked with providing financing to micro, small and medium enterprises (MSMEs).
Presidential Communications Office Undersecretary Claire Castro made the statement after former Finance Secretary Gary Teves questioned the effectiveness of the Maharlika Fund, arguing that its initial capital could have remained with government banks to earn interest and support domestic borrowers such as MSMEs.
“Of course, it is definitely effective,” Castro said when asked whether the Palace considers the MIF effective.
Castro said government financial institutions such as the Land Bank of the Philippines, the Development Bank of the Philippines and the Small Business Corp. were already equipped to provide financing to MSMEs under their respective developmental mandates.
“The Maharlika Investment Fund, meanwhile, has its own mandate,” she said.
Castro cited the fund’s mandate to make strategic and profitable investments that contribute to socioeconomic development while preserving and growing its value and generating sustainable returns.
“It is intended to mobilize and leverage government capital for long-term investments in strategic sectors and development project,” she said, quoting from the fund’s mandate.
“That is really the reason and purpose of the Maharlika Investment Fund,” Castro said.
The MIF was created as the Philippines’ sovereign wealth fund, with a mandate distinct from the lending functions of government financial institutions.
Castro’s remarks came as the Palace responded to criticism over whether the government could have generated greater economic benefits by retaining the fund’s initial capital within state-owned banks.
The government has maintained that the Maharlika fund is intended to generate returns through long-term strategic investments, while state financial institutions continue to serve borrowers, including MSMEs, under their respective mandates.