Philippines: It's high time to build its sovereign wealth fund on mineral resources — what Congress must do

The Philippines needs to rethink how it uses its mineral wealth.

Instead of treating mining taxes and royalties mainly as annual government revenues, the country must channel a defined portion into its sovereign wealth fund (SWF).

Why?

It's simple: It would convert finite natural resources into long-term financial assets, in virtual perpetuity.

It would mean future generations of Filipinos, not just the present, could also benefit from it.

The opportunity is significant.

How to do this?

The Philippines may simple cut-and-paste the examples of Norway, and Gulf nations. They have build massive sovereign wealth funds that benefit their people.

The Philippines, can do the same. The country sits on billions worth of mineral wealth.

Long to short: earmark a portion of the taxes, royalties and windfall profits generated by extracting finite mineral resources to be converted into a permanent national investment fund.

Today's Filipino lawmakers have a historic role to pay: They can set the policy through legislation.

Fact: The Philippines is one of the world's major producers of nickel, ranks among the leading producers of cobalt, and has substantial copper, gold and other "critical mineral" resources.

The Mines and Geosciences Bureau (MGB) valued metallic mineral production at ₱252.9 billion ($4.42 billion) in 2024, up from ₱249.71 billion in 2023.

From January to June 2026, the country’s metallic mineral production jumped 40%+ to over ₱200 billion compared to 2025, driven by higher gold prices that offset weaker production volume.

MGB data showed that the country's total mineral output reached ₱202.18 billion in the first half, higher than last year’s ₱142.99 billion.

Gold stood as the country’s most prized mineral asset by the end of June 2026, accounting for nearly 57% of the total value.

The value of gold output during the reference period surged by 42% to ₱114.50 billion from ₱80.43 billion, based on MGB data.

Yet the country has not established a systematic mechanism for converting mineral extraction revenues into intergenerational financial wealth.

The creation of the Maharlika Investment Fund (MIF) under Republic Act 11954 in July 2023 established the country's first sovereign wealth fund.

Its initial ₱125-billion capital subscription comprised ₱50 billion from Land Bank of the Philippines, ₱25 billion from the Development Bank of the Philippines and ₱50 billion from the National Government.

The government's intended funding sources included Bangko Sentral ng Pilipinas dividends, a portion of the national government's Philippine Amusement and Gaming Corporation (PAGCOR) earnings, proceeds from government asset privatisation and other sources.

Importantly, Section 6(d) of the law already recognises royalties and special assessments under the national fiscal regime as possible additional funding sources.

However, it does not establish a dedicated, automatic allocation of mining revenues to the fund.

Maharlika is beginning to build an investment track record. As of September 30, 2026, the Maharlika Investment Corporation (MIC) reported ₱2.85 billion in nine-month comprehensive income, including ₱2.18 billion in net income.

Active investments contributed ₱756.5 million, or 31% of nine-month revenue, while cumulative capital deployment reached ₱24.7 billion.

These results demonstrate the potential to generate returns from invested capital.

But the fund needs a more durable source of national wealth if it is to grow into a substantial intergenerational investment vehicle.

Republic Act 12253 (the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act) signed in September 2025, introduced a progressive royalty system and windfall profits tax.

The law provides for royalties of 1% to 5% for large-scale metallic mines outside mineral reservations, a minimum royalty for low-margin operations, and "windfall profits" taxes of 1% to 10% when profit margins exceed 30%.

The Department of Finance (DoF) projects an additional ₱25.08 billion in government revenues from 2026 to 2029, or approximately ₱6.26 billion annually.

Separately, the Philippine Extractive Industries Transparency Initiative reported ₱32.97 billion in mining taxes, fees and royalties in 2024.

It's a decent amount of money from the country's natural blessings for the Filipino people.

These revenues offer an opportunity to establish a dedicated mineral-wealth contribution to Maharlika.

First, Congress should closely look into amending or supplementing the Maharlika Investment Fund Act (RA 11954) to establish a Mineral Wealth Window within the MIF.

The simple aim: specify a fixed share or formula for transferring the national government's retained mineral royalties, windfall taxes and other eligible mining revenues into the fund.

The mechanism must protect existing statutory entitlements.

Under RA 12253, host local government units are entitled to 40% of qualifying national government collections from mining, while 10% of royalties from operations within mineral reservations is allocated to the Mines and Geosciences Bureau (MGB) and the Metals Industry Research and Development Center (MIRDC).

The sovereign wealth contribution should, therefore, come from the national government's remaining eligible receipts, after these obligations and other legally mandated allocations.

Norway offers a compelling example.

Its Government Pension Fund Global receives the state's net petroleum cash flow, investing the proceeds internationally so that oil wealth benefits generations beyond those who extract it.

Its fiscal framework generally limits budget use to the fund's expected real return rather than consuming its principal.

The Philippines could adopt a comparable principle for mineral resources, which are finite, in order for future generations to also benefit when they run out.

Congressional oversight is also needed to ensure transparent and efficient management of the nation's wealth fund.

A portion of mining revenues could be invested in diversified domestic and international assets, while investment returns support infrastructure, education, research, energy security and future economic development.

The arrangement must also preserve adequate funding for environmental rehabilitation, indigenous peoples (IPs) and host communities, and responsible mining oversight.

The underlying principle is straightforward: nickel, copper, gold and other minerals are finite. Once extracted, they cannot be replaced. But the financial value generated from them can be preserved, invested and multiplied.

Too long, didn't read (TLDR): The Philippines should not simply extract its mineral wealth. Its future crop of lawmakers should convert that wealth into an enduring national asset.