The lead for the jobs sector of the Private Sector Advisory Council, Go Negosyo chairperson Joey Concepcion, maintained Thursday that if done and run right, the proposed House Bill 6398 or Maharlika Investment Fund may be viable.

As a sovereign wealth fund sourced mainly from government institutions, the MIF may help the Philippines fund big-ticket projects while availing of the services of experts and professional managers from the private sector.

"We missed out on opportunities like TransCo, Malampaya, BGC (Bonifacio Global City), and Semirara because we didn't have a fund like this when these were bid out," Concepcion pointed out.

"Transco was already profitable, and then the private sector took it to another level. The land value now in BGC has skyrocketed, and Semirara's productivity has increased. Imagine how much the country could have earned if we had a fund like this back then," he added.

He said land values in the BGC area have skyrocketed from an average of P25,000 per square meter in 1995 to at least a million pesos some 25 years after the former military base was privatized and developed by the private sector.

Annual coal production in Semirara, on the other hand, went from a low of 800,000 tons in 1997 to 11.9 metric tons in 2016, nearly 20 years after the DMCI group bought Semirara Coal Corp, he explained.

"When the government bid out (these companies), their value was low. But because of good management they were able to turn it around and make it profitable," he stressed, adding that these assets should be managed by the private sector, "and then we will see the level of trust move up."

No conflicts of interest

"Right now, it is not clear how the fund will operate. But if you want the people's buy-in with this fund, you should assure them that it will be run by people who have no conflicts of interest and are very capable of turning in a profit for the fund," he said.

Concepcion emphasized that the fund's Board of Directors should be composed of prominent and well-respected Filipino businessmen.

"I think it's good that President Marcos has already expressed support for public-private partnerships," he said. Furthermore, having the President of the Republic as chairman will ensure that the fund will survive beyond his administration, he added.

Concepcion stressed that the fund should invest mainly in Philippine infrastructure and should limit its exposure to 10 to 20 percent in its investments.

"It could be a passive investor," he said, pointing out that with infrastructure investments such as roads and tollways, the fund can continuously earn profits.

"These privatizations were participated in by the conglomerates and most of them have been very successful. They have a track record, so what is our risk? They can bid for it, and they can manage it; we can ride on that for no more than 20 percent stake," he said.

He maintained that there are a lot of opportunities now in the Philippines and it would be right if the fund can invest in the reclamation of Manila Bay, for example, because that is a sure winner.
The proposal can also benefit from correct timing.

"I understand why it is an unpopular proposal. We have just come out of the pandemic, and we are all feeling the rise in interest rates and high prices," he said.

He added, however, that these headwinds are not insurmountable and should not deter the country from planning beyond the current crises.

"It does not have to be the whole P275 billion. It could be done in tranches. This is all temporary. Hopefully, the Russia-Ukraine conflict will simmer down, and the US will stop increasing interest rates, then consumer prices will start going down," he said. "We're ending the year on a good note, and we are seeing the same level of Christmas spending as last year, so that's good news," he said.

Senate leaders on Thursday welcomed the House's removal of the Government Service Insurance System and the Social Security System as fund sources in the MIF bill.

"We already said that establishing a sovereign wealth fund is a very good proposal, but we have to be circumspect about the sources of the fund and how it will be managed," Sen. Joel Villanueva said.

"The House of Representative's new scheme on the Maharlika Investment Fund wherein GSIS and SSS pension funds would not be tapped anymore is a very welcome development," Sen. JV Ejercito chimed in.

House Appropriations Committee vice chairperson Stella Quimbo, one of the bill's authors, said profits of the Banko Sentral ng Pilipinas will be considered as an alternative funding source in place of the GSIS and SSS.

"It is good that we conducted public consultations on the proposal. Concerns of the public, especially of Filipino workers who submit their GSIS and SSS contributions monthly, were validated," Quimbo said late Wednesday.

With Edjen Oliquino and Jom Garner
@tribunephl_eao @tribunephl_jom