Concepcion says Maharlika Wealth Fund could work, if ‘done properly’
Go Negosyo founder Joey Concepcion (INQUIRER FILE PHOTO)
MANILA, Philippines — The proposed Maharlika Wealth Fund (MWF) could present vast investment opportunities for the country if carried out properly, Go Negosyo founder Joey Concepcion said on Friday.
Concepcion said the proposed sovereign wealth fund, which the House of Representatives will deliberate as House Bill No. 6398, is a “good idea.”
“Done properly, I think it’s a good idea,” he said in a press statement.
‘Big ticket projects’
Among the benefits that Concepcion said that he sees is the opportunity to invest in big-ticket projects and the service of experts and professional managers from the private sector.
“Through these funds, people can participate in these big projects, and not just the big, private funds will benefit from the earnings,” the former presidential adviser on entrepreneur said.
“We missed out on opportunities like Transco, Malampaya, BGC and Semirara because we didn’t have a fund like this when these were bidded out. Transco was already profitable, and then the private sector took it to another level. The land value now in BGC (Bonifacio Global City) 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.
According to Concepcion’s press statement, land values in the BGC area have skyrocketed from an average P25,000 per square meter in 1995 to at least P1 million per square meter after 25 years, after the former military base was privatized and developed by the private sector.
Meanwhile, annual coal production in Semirara went from a low of 800,000 tons in 1997 to 11.9 metric tons in 2016, or nearly 20 years after the DMCI group bought Semirara Coal Corp.
“When government bidded out [these companies], their value was low. But because of good management they were able to turn it around and make it profitable,” Concepcion said.
“It should be managed by the private sector, and then we will see the level of trust move up,” he said.
Safeguards
Concepcion, however, said that to allay fears of corruption, the government should assure the public that the fund 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 that the fund’s proposed 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.
He also said that having the President of the Republic as chairman will ensure that the fund will survive beyond his PK
PH investments
The Go Negosyo founder further added 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, saying 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 the 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.
Opportunities, timing
“We have to remember, there are a lot of opportunities now in the Philippines. It would be nice if the fund can invest in the reclamation of Manila Bay, for example, because that’s a sure winner,” Concepcion said.
The proposal can also benefit from correct timing, pointing out that the proposed MWF is currently “unpopular” as the country continues to battle the COVID-19 pandemic and Filipinos are reeling from 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 doesn’t 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,” Concepcion 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 added.
The proposed Maharlika Investments Fund law seeks to establish a P275-billion sovereign wealth fund with an initial investment of P250 billion from the Government Service Insurance System, Social Security System, Land Bank of the Philippines and Development Bank of the Philippines (DBP), and P25 billion from the national government.
Due to mounting opposition from several business groups, civil society, and even legislators, lawmakers proposing the sovereign wealth fund recently decided to drop the GSIS and the SSS as contributors.
