MIC takes first crack at energy

‘We need to be able to distribute the capital and allocate it accordingly to different sectors’

The Maharlika Investment Fund, the country’s first sovereign wealth fund, is primed to make its debut investment in the renewable energy sector, Maharlika Investment Corp. president and chief executive officer Rafael Consing Jr. said on Monday.

At the sidelines of the SGV Philippine Economic Outlook in Makati City, Consing emphasized the urgent need to address the potential energy imbalance in the coming years.

“The reasons are quite obvious,” Consing explained, citing the Philippines’ high electricity costs and growing population. “If your supply is not growing, then you’re going to have an imbalance,” he said, emphasizing the need for proactive investments.

Consing highlighted renewable energy’s potential to address this concern as warned of potential supply shortages if investments are not made early.

However, the MIC president and CEO want to have a diversified approach, noting a planned 15 percent cap on the MIF’s exposure per sector.

“We need to be able to distribute the capital and allocate it accordingly to different sectors,” he said, stressing the importance of diversification for a broader investment scope.

“If we don’t put limits,” he warned, “we might become overweight in some sectors and leave out others that need attention,” Consing said.

Meanwhile, Consing said the MIC is currently in its organizational phase, focusing on finalizing its budget with the Department of Budget and Management and coordinating with other government agencies like the Governance Commission for Government-Owned and Controlled Corporations and the Civil Service Commission.

The MIC is overseen by a nine-member board comprising the Finance secretary as chairperson.

Meanwhile, the MIC president and CEO, presidents/CEOs of the Land Bank of the Philippines and Development Bank of the Philippines, two regular directors, and three independent directors from the private sector would serve as member boards.

“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,” Consing said.

RE a must

“It has to be renewable energy. If the supply is not growing, then you’re going to have an imbalance, an issue two to three years from now,” he said.

“If you take a look at electricity numbers last year, we barely had about anywhere between 15 to 20 percent electricity surplus during peak hours,” Consing added.

He said the Maharlika Investment Fund has an initial 15 percent allocation to sectoral development which is also distributed to two other sectors, namely infrastructure and agriculture.