Today I want to dig into the numbers behind the Maharlika Investment Fund. It is now exactly three years since LANDBANK and DBP remitted a combined ₱75 billion to serve as seed capital for the sovereign wealth fund. We have enough data to quantify the overall economic cost of Maharlika.
Finding No. 1: ₱17.84 Billion in Foregone Treasury Dividends
Under the Dividend Law (R.A. 7656), government-owned banks must remit at least 50% of their net earnings to the National Treasury. Right after the ₱75 billion transfer, the executive branch issued E.O. 43 and E.O. 48, zeroing out the 2022 dividend obligations for both LANDBANK and DBP. This is money the Treasury would otherwise have received. This was done to protect the banks’ capital positions and keep them compliant with BSP capital adequacy rules after remitting their cash to Maharlika.
LANDBANK’s 2022 net income was ₱30.06 billion, which would have yielded a statutory dividend of ₱15.03 billion. DBP’s net income for the same year was ₱5.61 billion, yielding would-be dividend of ₱2.81 billion.
The total foregone revenue to the Treasury is ₱17.84 billion.
Finding No. 2: Foregone Returns of ₱3.2 Billion Against the Risk-Free Rate
Maharlika kept most of its money in bank deposits, so it took on almost no investment risk. The fair test for money held this way is what it would have earned in Treasury bills, the safest peso investment available. If a fund taking no real risk earns less than Treasury bills, the government would have done better simply holding its own securities, or borrowing less, since it was issuing Treasury bills at those same rates during the period.
Maharlika's financial statements show net income of ₱2.68 billion in 2024 and ₱2.36 billion in 2025. On the funds actually sitting in Maharlika’s hands (around ₱76 billion in 2024 and down to ₱71 billion in 2025), that translates to a return of roughly 3.5% in 2024 and 3.3% in 2025.
During that window, the BSP policy rate stood between 5.75% and 6.50% in 2024 before falling to 4.50% by December 2025, and 364-day Treasury bills yielded roughly 5% to 6% at auction. Had LANDBANK and DBP simply held the ₱75 billion in Treasury bills, it would have earned about ₱4.5 billion in 2024 and ₱3.75 billion in 2025. Against Maharlika's actual net income, that is a shortfall of roughly ₱1.8 billion in 2024 and ₱1.4 billion in 2025, or about ₱3.2 billion over two years.
Finding No. 3: Foregone Returns of ₱14 Billion Against Realized Returns had the Banks Retained the ₱75 Billion Capital
How much was the ₱75 Billion seed capital earning inside the banks had they not remitted to Maharlika? LANDBANK delivered a return on equity (ROE) near 15% in 2025, while DBP generated an ROE of roughly 8% in 2024 (about 4% in 2025, after higher loan loss provisions).
Had the ₱75 billion seed capital stayed inside LANDBANK (₱50 billion) and DBP (₱25 billion), it would have generated approximately ₱9.5 billion annually in net income for the banks. Maharlika’s average ₱2.5 billion annual income represents an opportunity cost of ₱7 billion a year, or ₱14 billion over two years.
(Note: Findings 2 and 3 are alternative benchmarks for the same foregone return and should not be added together.)
Finding No. 4: Reduction of ₱470 Billion to ₱535 Billion in Risk-Weighted Asset Capacity (including Lending Capacity) from the ₱75 Billion Maharlika Deduction
Bank rules limit how much a bank can lend based on how much capital it holds. Because the Maharlika investment is deducted from the banks’ capital under BSP rules, it lowers the maximum amount the banks can lend.
Under the BSP Basel III framework, banks’ risk-weighted asset capacity (which includes lending capacity) is capped by their qualifying capital.
Common Equity Tier 1 (CET1) capital represents a bank’s core, highest-quality loss-absorbing equity. Every peso of CET1 acts as the foundation that supports multiple pesos of risk-weighted assets, which are primarily loans.
When LANDBANK and DBP remitted ₱75 billion to initialize Maharlika, the transaction was classified as an equity investment in an unlisted, non-bank corporation. Under BSP capital rules, unlisted equity investments are deducted peso-for-peso directly from a bank’s CET1 capital.
Because regulatory capital rules dictate that risk-weighted assets cannot exceed a set multiple of capital, subtracting CET1 directly shrinks the maximum volume of loans the bank can extend.
At the BSP’s 10% total Capital Adequacy Ratio (CAR) minimum floor, the required capital leverage ratio is 10-to-1. Removing ₱75 billion in CET1 lowers the ceiling on potential risk-weighted assets by up to ten times that amount, or ₱750 billion.
In practice, LANDBANK and DBP operate above the statutory minimums, holding CAR levels between 14% and 16% to maintain healthy safety buffers. At these operating ratios, each peso of CET1 supports roughly ₱6.25 to ₱7.14 in risk-weighted assets, meaning the ₱75 billion capital extraction removes ₱470 billion to ₱535 billion in risk-weighted asset capacity.
(Sources: Maharlika Investment Corporation, audited financial statements for 2024 and unaudited 2025 results; Executive Order Nos. 43 and 48 (s. 2023); Republic Act Nos. 7656 and 11954; LANDBANK and DBP financial disclosures and press releases, 2022 to 2025; Department of Finance statements; Bangko Sentral ng Pilipinas Monetary Policy Reports; Bureau of the Treasury auction results as reported; and reporting by BusinessWorld, Manila Bulletin, Philstar, GMA News, the Philippine Daily Inquirer and Rappler.)
