PENANG will continue to lobby for an establishment of a Penang International Financial Centre (PIFC) to complement its standing as a manufacturing and tourism hub.
Chief Minister Chow Kon Yeow (Tanjong - Pakatan Harapan) told the state assembly legislative sitting last night that the PIFC will remain as a long-term target of the state although the original proposal has yet to sit well with the Finance Ministry.
It is learnt that the PIFC remains an alternative area for the state if the US import tariffs derail the semiconductor industry, which remains the powerbase of the state's economy.
Chow this in response to a supplementary question from Gooi Hsiao - Leung (Bukit Tengah - PH).
“I am not disappointed because we (the state government) have only just begun this initiative at the preliminary or even pre-preliminary stage, through a letter to the Prime Minister and possibly extended to the Treasury to inform them of the state’s initiative,” said Chow, who is also the Batu Kawan MP.
Chow referred the Mutiara Light Rail Transit (LRT) project as an example, noting that it took the state nearly 10 years before it secured federal approval followed by financing to underwrite the mammoth infrastructure project.
“Major international financial centres abroad can take up to seven years before becoming fully operational. Therefore, the process of selecting a location for PIFC will be carried out carefully, in phases, and based on suitability analysis as well as current market needs,” he explained.
The proposed PIFC is a strategic initiative built on three pillars aimed at strengthening the state’s financial ecosystem.
The first involves creating a state sovereign fund using state assets such as land to generate investment capital without requiring direct federal financing.
The second is the digitalisation of state-owned land assets into a Real Estate Investment Trust (REIT) to attract private investors.
The third includes developing a physical financial hub by creating a special zone equipped with modern infrastructure and a digital business ecosystem, supported by data centres, fintech services, and professional support industries.
To make the centre viable, Penang has also sought federal approval for a special financial zone to drive forward the PIFC initiative.
The public think tank - the Penang Institute was appointed to study the preliminary viability of the project and it is learnt that the outcome is leaning towards favourability, especially in view of the wobbly global economy.
The institute was also directed to engage three private companies, who have expressed an interest in playing a role in the PIFC. – November 15, 2025