A sovereign wealth fund will help attract more investors and support economic growth in the Philippines, according to British Chamber of Commerce of the Philippines chairman Chris Nelson.
Nelson, former president of Philip Morris International-Philippines and now chair of Pasig City-based Domuschola International School, said a long-term wealth fund would help in the development of infrastructure projects and attract more foreign investments.
“The proposed sovereign wealth fund will help President Ferdinand Marcos Jr. keep the country on the high-growth path. We want to assure the public that the management of the fund will follow best practices and the principles of transparency and accountability,” he said in an interview.
Nelson said House Bill No. 6608 in its present form was designed to insulate the proposed Maharlika Investment Fund from political influence.
He said the wealth fund could help draw more interest to the Philippines as an investment destination.
“Let me just reiterate that we want the Philippines to be a very high focus for British companies and investors. And I think a well-managed, properly-studied sovereign wealth fund can assist that, along with other actions,” he said.
“I think we agree the overall aim is to invest longer term in key areas of the country, which, as announced by the administration, is infrastructure, power, and agriculture. We clearly support [these] investments to assist the overall efforts for recovery. So, I think long-term investment is good. Clearly what is important is transparency,” Nelson said.
Nelson said the government could study and look at best practices in other countries that manage their own sovereign funds. Among these countries are France, Norway, and Singapore.
He said UK companies were eager to hear more updates on the progress of the fund.
“We are waiting for further details. However, in general, there is significant interest in the Philippines. The chamber, in partnership with the UK Embassy, works very hard on promoting trade and investment opportunities to UK companies,” Nelson said.
More than 300 British companies were operating in the Philippines as of end-2022.
Nelson said British firms, including the world’s leading infrastructure contractors, were keen on bringing in more projects to the Philippines. He said with the promise of a sovereign wealth fund, interest might exceed expectations.
“The Philippines has a lot of potential. And to boost that potential, you seriously need increasing investments in infrastructure. The Philippines’ continuing potential to grow the economy will need more power requirements that can be addressed by having a ready fund to support the projects,” said Nelson.
He noted that President Ferdinand Marcos Jr. himself decided to discuss the proposed Maharlika Wealth Fund at the World Economic Forum in Davos, Switzerland.
“The President, as I understand, will be outlining details when he goes to Davos in Switzerland. I think it’s also good the President goes to Davos and talks about the Philippines because we need to see the Philippines up on a higher rung with investors. Hopefully, this will further increase foreign direct investments,” Nelson said.
The House of Representatives in December overwhelmingly approved the MIF bill which was principally authored by Speaker Martin Romualdez. The Senate will tackle its own version of the bill.
Romualdez said the amendments introduced by the House in the MIF bill during deliberations included more safeguards against possible abuse and fraud to address the concerns of the people.
Among the contributors to the fund, according to the revised bill, are Land Bank of the Philippines, Development Bank of the Philippines, Philippine Gaming and Amusement Corp. and Bangko Sentral ng Pilipinas.
The BCCP said the push for the MIF was in perfect timing given the massive challenges in the power sector amid the diminishing gas reserves and the increasing pressure to shift to renewable energy sources which are not cheap alternatives.
“The US is a leading advocate of renewable power and the efforts by the Philippines to shift to this energy source sits well with the UK position,” Nelson said.
