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Maharlika Investment Corp. to make first investment by end of 2024

The Philippines’ sovereign wealth is set to make its first investment by the end of the year, likely to be in the renewable energy sector, as its operator said it is now in the process of finalizing its organizational structure.

Maharlika Investment Corp. (MIC) president and chief executive officer Rafael Consing Jr. on Monday said the Maharlika Investment Fund (MIF) is likely to make its first investment on renewable energy, with infrastructure and agriculture making the top three priorities.

“The reasons are quite obvious right, I mean you and I, we pay for very high electricity costs, and it takes a lot of time to build up electricity,” he told reporters at the sidelines of the SGV Philippine Economic Outlook in Makati City.

“The economy’s still growing, population is still growing, and if your supply is not growing then you’re going to have an imbalance. You’re going to have an issue I would say two, three years from now, so hence it makes sense for one to begin investing this early,” he added.

Consing was appointed as MIC president and CEO last November, after being appointed as executive director of the Office of the Presidential Adviser for Investment and Economic Affairs (OPAIEA) earlier in the year.

Under its charter, the MIC is mandated to act as the government vehicle for mobilizing and utilizing the MIF for investments in transactions to generate optimal returns on investments.

Sectoral limits

Consing said renewable energy will probably make up most of the initial investments made by the MIC, but this would be addressed in time as the agency is set to implement a 15% cap on its exposure per sector given the breadth of its scope.

“In order for us to be able to achieve that breadth of investment scope, then we have to be able to distribute the capital and allocate it accordingly to the different sectors that actually require it,” he said.

“If you don’t, for example, put limits to it, then you might become overweight in some sectors and therefore leave out others that may actually require attention or capital,” he added.

Consing last month backed proposals made by House Speaker Ferdinand Martin Romualdez for the MIC to invest in the National Grid Corporation of the Philippines (NGCP), citing benefits such as lower energy costs and a more reliable and resilient grid.

Romualdez’s proposal was made after Panay Island was hit by a widespread power outage as three of the largest power generating units in the area tripped, and the maintenance shutdown of a unit.

For the first half of the year, Consing the MIC will focus on organization, with the budget currently being fine-tuned by the Department of Budget and Management (DBM). It is also coordinating with the Governance Commission for Government-Owned and Controlled Corporations (GOCCs), and the Civil Service Commission (CSC).

“I’m really hoping that in the next month or two we can gain better traction because we’ve already slowly (been) getting these approvals from government agencies,” he said.

The MIC is governed by a nine-member board of directors made up of the Finance secretary as chairperson, the MIC president and CEO, the Land Bank of the Philippines president and chief executive officer, the Development Bank of the Philippines president and CEO, two regular directors, and three independent directors from the private sector.—AOL, GMA Integrated News