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TWO government financial institutions are expected to ask for the extension of a “regulatory relief” from the central bank after making a capital infusion to the Maharlika Investment Corporation (MIC).
Finance Secretary Ralph G. Recto told reporters that the Land Bank of the Philippines (LandBank) and the Development Bank of the Philippines (DBP) will likely request an extension on the regulatory relief from the Bangko Sentral ng Pilipinas (BSP).
“There’s a relief. I think the relief is only good for one year,” Recto said.
The BusinessMirror sought LandBank’s and DBP’s comment on a possible request to extend the regulatory relief, but both banks declined to comment.
To recall, the DBP and LandBank sought “regulatory relief” in October last year due to concerns that the banks might find it difficult to comply with the BSP’s minimum Capital Adequacy Ratio (CAR) requirement after contributing to the country’s first sovereign wealth fund.
The BSP requires both state-run lenders to maintain a minimum 10-percent CAR; otherwise, they would face sanctions for any breach.
“To me, it’s a non-issue dahil [because that is] government guarantee,” Recto said.
The Finance chief added that the books of LandBank and DBP are both “okay,” adding that he is not worried about those.
“Parang may [They have a] sovereign guarantee yan dahil pag-aari ng gobyerno yan eh [because the government owns them],” Recto said.
The DBP and LandBank remitted P25 billion and P50 billion, respectively, to the Bureau of the Treasury (BTr) in September last year, for a total of P75 billion to the Maharlika Investment Fund (MIF).
MIC President and Chief Executive Officer Rafael D. Consing, Jr. told the BusinessMirror that the funds remain with the Treasury’s accounts in LandBank and DBP, available for the corporation to use anytime.
Under Republic Act (RA) No. 11954 or “An Act Establishing the Maharlika Investment Fund,” the MIC is created as the “sole vehicle for mobilizing and utilizing the Maharlika Investment Fund [MIF] for investments in transactions aimed at generating optimal returns on investments [ROIs].”
The Act states the MIC shall have an authorized capital stock of P500 billion, of which the P125-billion seed capital will come from the LBP and DBP.
The additional P50-billion funding, meanwhile, will be contributed by the Bangko ng Sentral ng Pilipinas, the national government’s share in the Philippine Amusement and Gaming Corp. (Pagcor), and government financial institutions.
Earlier, Consing said the MIC is targeting to generate $1 billion or approximately P56 billion in investments for the energy sector, particularly in solar energy, by the end of the year.
Consing added that funding for the energy sector will also include MIC’s contribution apart from those coming from the sovereign wealth funders.
Image credits: Mdvedwards | Dreamstime.com
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