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Wednesday, July 17, 2024

MIC eyes investments in 4 areas

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The Maharlika Investment Corp. (MIC) will look at investment opportunities in the areas of tourism infrastructure, agro-urbanism, energy and information and communications technology (ICT), the sovereign fund’s newly appointed president and chief executive Rafael Consing Jr. said Wednesday.

“What we’re going to be doing is identify four pillars in terms of our investments for the Maharlika Investment Fund (MIF),” Consing said in a briefing.

In terms of the actual rollout of the investments, Consing said it was going to be a function of “what the opportunities are out there, and how soon these opportunities come.”

“So, for example, in the case of tourism infrastructure… what we want to be able to do is to enhance and to reintroduce basically the tourism proposition of the Philippines. And the main objective, putting it in very simple terms, is to get the tourist from where he’s originating to his destination at the soonest possible time. And when we talk about that, we’re talking about physical connectivity,” Consing said.

He said MIC’s approach would be to look at the NEDA Board-approved projects, which include 197 flagship infrastructure projects.

Of this number, 122 are in physical connectivity that include airports, bridges, roads, and marine connectivity, with 38 falling under the Public-Private Partnership scheme.

“The fastest way is for us to be able to choose one of those projects and see how we can immediately enable and be able to roll out the first part of our investment,” Consing said.

Out of those 38 PPP projects, there are about four airports, he noted.

“Obviously, Bulacan [airport] is already being funded by the SMC Group. You have already NAIA [that is] currently going through a PPP, its own process, and you’ve got two additional or two remaining airports that are there,” he said.

Road and bridge projects could also be considered and the MIC investment committee would be the one doing studies and see which of those would deliver the most immediate impact, and the one that’s immediately needed, Consing said.

“And, third, the one that’s actually going to have the most impact in terms of socioeconomic development and generating, hopefully, commerce in those areas,” he said.

In the area of power, Consing said he was looking at the Agus Pulangi power plants located in Mindanao, one of the projects that have been approved by the NEDA Board as part of the PPP program.

“When we take a look at IRR [implementing rules and regulations], it’s not just the financial return, but rather, similarly, the economic impact of these investments. Because if you look at all four pillars, the common thread… is really generating employment and socioeconomic development or being able to meet the socioeconomic development goals of the Philippines, of the government,” Consing said.

“The other thing to consider also is our ability to undertake this without the need for further debt. So, I think that’s truly important, particularly given where we are now in terms of the country’s balance sheet,” he said.

The MIC would undertake roadshows as follow-ups to previous roadshows done by the government to make the MIF known to global investors, Consing said, given that initial indications have already been expressed by potential investors.

“When Maharlika was being marketed, there was no CEO. There was really no employee. I’m employee number one. And that was what I used to do before. I’m very happy to follow that up with a roadshow and, again, begin immediately that process of fundraising,” Consing said.

Over the next 30 to 60 days, Consing hopes “we’ve been able to fill up certain of these very important roles within the management team.”

MIC has a nine-member board of directors consisting of the Secretary of Finance as the chairperson in an ex-officio capacity; president and CEO of MIC; president and CEO of the Land Bank of the Philippines; president and CEO of the Development Bank of the Philippines; two regular directors, appointed by the President for a term of three years; and three independent directors from the private sector, appointed by the President for a term of one year.

Earlier, the Department of Finance expressed its full support to the revised IRR of the Maharlika Investment Fund Act.

DOF cited the IRR’s emphasis on ensuring the independence of the Board of Directors of the MIC allows it more headroom to form credible oversight and risk management bodies while upholding the highest standards of effective fund management.

The revised IRR gave the President authority to accept or reject nominees in the MIC board of directors and removed the specific advanced educational degree requirements for those who can be appointed to manage the country’s first sovereign wealth fund.

Under Section 39 of the previous IRR, the president and chief executive officer of the MIC “must have an advanced degree (MBA, MA, MSc, PhD) in Finance, Economic, Business Administration, or a related field from a reputable university. Additional professional certifications such as CFA or CPA are preferred. These qualifications were removed from the revised IRR.

Stringent requirements for the chief investment and operating officer have also been eased. Additional requirements for regular and independent directors of the MIC board were also deleted.

MIC has an initial capitalization of P125 billion. LandBank and DBP have already transferred their contributions, as the founding government financial institutions, of P50 billion and P25 billion, respectively to the account of the Bureau of the Treasury. LandBank deposited their share on Sept. 14 while DBP remitted on Sept. 15.

The remaining P50 billion of MIC’s initial capitalization will be sourced from the national government. One of the sources is the Bangko Sentral ng Pilipinas dividend remittance. BSP has already remitted P31.859 billion for 2023.

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