Landbank remits P50B for Maharlika fund

State-owned Land Bank of the Philippines has remitted to the Bureau of the Treasury (BTr) its mandatory contribution for the initial capital of the Maharlika Investment Fund (MIF) —the country’s very first sovereign wealth fund.

In a statement on Friday, Landbank said it remitted to the Treasury its P50-billion contribution to the Maharlika Investment Corporation (MIC) as mandated by Republic Act No. 11954, which created the MIF.

The state-owned bank’s remittance came several months after Finance Secretary Benjamin Diokno, chairman of the Landbank, announced that the lender’s Board approved its P50 billion investment in the MIC.

The MIC is a government-owned company, that will manage the MIF —a pool of funds sourced from state-run financial institutions that will be invested in high-impact projects, real estate, as well as in financial instruments.

As quoted in the news release, Diokno said that Landbank’s P50-billion investment to the MIF “has already been settled with the BTr on Thursday, 14 September 2023, following the enactment of the MIF enabling law and the issuance of its Implementing Rules and Regulations (IRR) by the BTr.”

The IRR of the MIF law was released late last month.

"We are witnessing a growing interest for investments in the MIF from multilateral financial institutions and foreign investors. With the regulatory requirements in place, and after securing the seed capital from state-run institutions, we are confident that the Fund will be operational by year end,” said the Finance chief.

For her part, Landbank president and CEO Lynette Ortiz said the law creating the MIF has enough safeguards to protect the bank’s invested funds.

“The MIF law has put in place adequate safety nets to ensure full disclosure and transparency in the management of the Fund, as well as the integrity and professionalism of the management team that will be entrusted to lead the Maharlika Investment Corporation,” said Ortiz.

Apart from Landbank, the law mandates that the MIF’s initial capitalization would be sourced from the Development Bank of the Philippines (DBP) at P25 billion and the national government at P50 billion.

The contribution from the national government will come from the following sources:

• BSP's total declared dividends
• National government's share from the income of PAGCOR
• Properties, real and personal identified by the DOF-Privatization and Management Office
• Other sources such as royalties and/or special assessments.

Under the law, the MIF has an authorized capital stock of P500 billion.

The Bangko Sentral ng Pilipinas’ Monetary Board has earlier declared a dividend of P31.859 billion “in favor of the national government,” which will then be used to bankroll the MIF.—AOL, GMA Integrated News