SAN FRANCISCO – President Marcos said on Thursday (Philippine time) that the government intends to finance about 80 flagship infrastructure projects, including the long-delayed renovation of the Ninoy Aquino International Airport (Naia), through the newly established Maharlika Mutual Fund (MFI).
In a speech at the Philippine Economic Conference at the Ritz-Carlton Hotel, the president said multilateral financing will provide an additional source and means of financing the government’s priority projects, including flagship infrastructure projects that “offer high returns and significant social economic impact.”
He added that the government has prioritized the implementation of 197 flagship infrastructure projects worth about $55 billion that aim to improve physical and digital connectivity, water, agriculture, health, transport and energy infrastructure.
The National Economic and Development Authority (Neda) board, chaired by the president, approved 194 infrastructure projects worth about P9 trillion in March last year, including the Naia renovation, the railway lines in Panay and Mindanao, the Metro Cebu expressway and Ilocos Sur Trans Basin Project.
Marcos told investors at a briefing that “there are plenty of opportunities waiting for you in the Philippines.”
“With a solid reform agenda and unrelenting growth despite headwinds, the Philippines is poised to become a leading investment hub in Asia,” he said.
Speaking to reporters after the event, Socioeconomic Planning Secretary Arsenio Balisacan said infrastructure projects to be financed by MFIs “are based on expected rates of return.”
He stated that some of the projects were in urban areas, which he noted later ensured the profitability of the MFIs.
He also said the MFI may finance the Mindanao railway after the Philippine government withdrew from loan negotiations with China.
In a Viber message to the Inquirer, Balisacan said Maharlika Investment Corp., which will manage the multilateral investment fees, “could also invest in a potentially profitable” public-private partnership proposal to restore and maintain Naia.
The example of Indonesia
MIC President and CEO Rafael Consing Jr., who was appointed by the president this week, said during his first briefing on Wednesday that in addition to the Naia project, among the airports being considered for investment through the MIF is the tycoon’s New Manila International Airport Ramon Anga in Bulacan Province, the expansion of Laoag International Airport and the modernization of Laguindingan Airport.
Consing added that the government could also inject assets into the MIC to increase its capitalization and profits.
He said the Philippines could copy Indonesia’s experience and ask the government to contribute both cash and assets to its sovereign wealth fund.
Consing said the proposal would be pushed through once the MIC board is constituted.
By transferring assets to the MIC, the national government could increase its stake in the MFI, although it noted that an executive order or new law may be needed to legally transfer these assets.
“So if you look at MIC itself, if I remember correctly, it has the ability to raise its capital to around £500 billion,” Consing said.
MIC has P107 billion in seed capital from two state-owned lenders and the Central Bank of the Philippines.
Consing said MIC would look for “low-hanging fruit” it could pick to achieve its long-term investment goals, particularly government assets that the company could absorb, rehabilitate and privatize.
At the top of Consing’s mind are “energy assets of non-energy agencies that are not performing optimally.”
“Perhaps we will help in its revitalization through a technical partner. Once we achieve this level of optimal capacity, we will begin to monetize it, either partially or fully,” Consing noted. “I think if you offer that opportunity, you’ll be able to generate a lot more value.”
The MIC could also sell bonds “as needed” and would organize overseas roadshows targeting foreign pension funds and other sovereign wealth funds to raise more capital to use to support key sectors such as tourism infrastructure, agri-urbanism, energy security and digital infrastructure technologies – he said.
For now, however, he has ruled out the possibility of MIC investing in nuclear energy.
— WITH REPORTING BY IAN NICOLAS P. CIGARALA