1 month ago
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Eyes shift to asset-based capital
MANILA, Philippines — The Maharlika Investment Corp. (MIC) is gearing up to announce a major infrastructure investment in the coming months, as the investment fund continues its strategic push into high-impact sectors, including energy and agriculture.
MIC president and CEO Rafael Consing Jr. confirmed in an interview with One News PH’s The Big Story that the upcoming deal would involve a foreign-listed company and align with MIC’s mandate to support national development.
“We’ve got one more that we’re going to be announcing soon. It’s quite significant because it involves a listed company – a foreign-listed company,” Consing said.
Consing clarified that the deal does not involve transportation, a sector that remains a priority for the sovereign wealth fund.
The announcement followed MIC’s previous investments in the National Grid Corporation of the Philippines (NGCP) and Thailand-based Charoen Pokphand Group Co., Ltd. (CP Group).
MIC’s involvement in NGCP has fueled speculation over whether the government-backed investment firm intends to take over the private sector-run transmission grid operator.
Consing dismissed such claims, clarifying that MIC’s participation is about ensuring energy security, not ownership.
“There was never any intention to take over. This should remain in private sector hands,” he said.
“But with the participation of the government, both as a regulator and as a shareholder, I think that’s enough,” he added.
On concerns over the possibility of Congress revoking NGCP’s franchise, Consing warned of the financial repercussions, noting that the government would need to compensate current owners.
“If they decide to remove it from the current owners, the government will have to pay the owners of NGCP. That repayment amount that’s due them is quite a large sum. It’s going to cost the whole country,” he said.
Possible capital expansion
The MIC is also considering expanding its capital base by shifting from a cash-based to an asset-based sovereign wealth fund while maintaining a moderate risk approach with its investments, its chief said.
Consing said the MIC is looking for more sustainable funding sources beyond its P125-billion capitalization plan. So far, it has received P75 billion in initial capital, with funding from state-run Land Bank of the Philippines and Development Bank of the Philippines.
“We haven’t drawn in that P50 billion just yet. We will do that once we’ve been able to deploy a significant amount of what we have right now,” he replied when asked if MIC would request additional capital from the two banks.
Consing said that unlike many sovereign wealth funds (SWFs) that are backed by natural resource revenues, such as oil in the Middle East, gold in Africa or copper in Chile, the Philippines does not have such windfall gains.
As a result, the MIC is exploring ways to diversify its capital base and make its funding model more sustainable.
“One of the things that we’ve spoken to the president about is the possibility of pivoting MIC, not just as a cash-based sovereign wealth fund, but in fact as an asset-based sovereign wealth fund,” he said.
This would involve seeding MIC with government-owned and controlled corporations (GOCCs), similar to how other SWFs worldwide have been structured.
“If you look at other sovereign wealth funds across the globe, they were in fact seeded with GOCCs,” Consing said.
