DAVOS, Switzerland: The Philippine economy is forecast to grow by around 6.5 percent this year because of the expected slowdown of the global economy, Finance Secretary Benjamin Diokno said.Diokno made the statement as the Philippine government expects a strong full-year gross domestic product (GDP) growth for 2022, most likely much faster than its growth target of 6.5 to 7.5 percent.'And that's still one of the highest if not the highest growth projections in the Asia-Pacific region,' he said.In a speech during a luncheon hosted for President Ferdinand 'Bongbong' Marcos Jr. and Philippine chief executive officers (CEOs), Diokno said the country's bustling manufacturing sector, record-low unemployment, and stable and resilient banking system can alleviate buffers against external headwinds, all indicating a resilient economy.Opening economic sectors to foreign equity, improving the ease of doing business and allowing for modern transformative industries to take root and grow will further sustain the economy, he added.At the same time, Diokno said the Marcos government has created a more competitive and enabling environment through public-private partnerships to further expand the Build, Better, More infrastructure agenda of the administration.This will further boost investments on top of the government's goal to spend at least 5 to 6 percent of GDP on infrastructure, he added, noting that all these form the backbone for the rapid and sustained growth for the Philippines.But because of the current challenges, the Finance chief said, the Philippines is taking the first steps on the launching of the Maharlika Investment Fund, the country's first-ever sovereign wealth fund that will support the goals set by the administration in the Philippine Development Plan 2023-2028.'The fund, which will be established in keeping with the highest standards of accountability and sound fiscal management, aims to diversify the country's financial portfolio,' Diokno said, adding that he looks forward to discussing the fund during the World Economic Forum (WEF) in Davos.'May the next few days bring forth more intensive collaboration and cooperation toward genuine economic transformation,' he said.The Department of Budget and Management earlier said the sovereign wealth fund — which is typically financed by a State's surplus revenues or reserves — will be used by the government to invest in a wide range of outlets such as foreign currencies, fixed-income instruments, domestic and foreign corporate bonds, commercial real estate and infrastructure projects.The proposal, however, faced opposition as some groups questioned the country's need and readiness for a sovereign wealth fund, given the government's budget deficit and record debt.Critics also hit the provision stating that major pension funds will be used as sources, warning this could put people's money at risk.The backlash prompted authors of the Maharlika Investment Fund bill to make an amendment, which provides that dividends of the Bangko Sentral ng Pilipinas would be used as an initial investment instead of Social Security System and Government Service Insurance System contributions.Other funding sources include P50 billion from the Land Bank of the Philippines and P25 billion from the Development Bank of the Philippines.The President is expected to present the proposed sovereign wealth fund when he joins global leaders and top CEOs at the WEF this week.
