Remember the Maharlika Investment Fund, the pseudo-sovereign wealth fund that President Ferdinand Marcos Jr. signed into law in July 2023? After almost two years of being dormant, it finally got to start investing in early 2025.
First, on January 27, the Maharlika Investment Corporation secured 20% of the shares of the National Grid Corporation of the Philippines, along with two seats in NGCP’s board. If you don’t know yet, the NGCP is a private monopoly that operates and maintains the country’s power transmission network.
Then on February 24, it was announced that Maharlika would lend as much as $76.3 million (more than P4.4 billion) to Makilala Mining Company so that Makilala can update its studies and plans for a mining project. Essentially, Maharlika is giving Makilala short-term funding to get everything in order before starting operations.
Are these worthwhile investments on the part of Maharlika, which got its seed capital from state-owned banks (Land Bank and DBP) as well as the Bangko Sentral ng Pilipinas?
Power transmission
On the one hand, some people say it’s high time that the government acquires part ownership of NGCP.
You see, exactly 40% of NGCP’s shares are controlled by the State Grid Corporation of China, a Chinese state-owned company. By acquiring a fifth of total shares, Maharlika’s maiden investment evens the power balance in NGCP, even if NGCP has previously insisted that it’s a company controlled by Filipinos.
In the words of Energy Secretary Raphael Lotilla, who used to teach at the UP School of Economics, “Maharlika can pave the way for better coordination between the DoE [Department of Energy] and the NGCP to help expand transmission connections in a timely manner and speed up the interconnection of our power grid across the archipelago.”
The deal is expected to yield returns, too. According to Val Villanueva of Vantage Point, Maharlika invested P19.75 billion worth of convertible preferred shares, and this is expected to yield a return of about P1.28 billion per year.
But is Maharlika’s role in NGCP an assurance that the government will have significant power to influence NGCP’s decisions? Not really; Maharlika has only two out of the 15 board seats. Will Maharlika’s investment also ensure lower power rates for consumers and industrial users? Not necessarily.
Also, note that the Philippine government already has regulatory and legal mechanisms to control NGCP without spending Maharlika’s money.
Note that NGCP obtained a concession agreement to operate and maintain the power transmission assets, but those transmission lines and towers are still owned by the government through the National Transmission Corporation or TransCo. Meanwhile, both the Energy Regulatory Commission and the DOE exert regulatory power over NGCP and its operations.
In short, rather than splurge Maharlika’s already limited funds on buying NGCP shares, the Marcos government could have focused instead on stricter regulation and enforcement of existing laws to hold NGCP accountable (which has been charged with allegations of undeserved profits, sky-high compensations and dividends, and mismanagement).
Mining
Arguably the more dubious investment is Maharlika’s loan to Makilala Mining Corporation, a subsidiary of Celsius Resources, an Australia-based mining firm that does business throughout the Philippines.
In March 2024, Marcos visited Melbourne and secured $1.5 billion of investment pledges from companies there, including Celsius. Fast forward to 2025, Maharlika is keen to start its Makilala flagship project, the Maalinao-Caigutan-Biyog Copper-Gold Project in Pasil municipality, Kalinga.
In March 2024, Makilala was granted by the Department of Environmental and Natural Resources a 25-year mining permit, giving them “exclusive rights to undertake rational exploration, development, and commercial production of copper and associated minerals.” But they’ve yet to finalize funding options, and Maharlika’s investment will allow Makilala to “provide additional proof of financial capability”— a necessary step before they can proceed to develop a mine there.
Rafael Consing, president and CEO of Maharlika, said that helping Makilala “aligns directly with Maharlika’s overall investment strategy, which is centered on driving sustainable economic growth and creating long-term value for the Filipino people.”
Consing added that “Makilala’s plans are much more sustainable than how other mining companies have operated historically.” He also said, “Following the lifting of the ban in mining, we felt that this is an area where we can truly leverage and really add value to the economy.”
Again, is this the wisest use of Maharlika’s money? Is there an absolute necessity to pour money into a sector that has been poorly regulated by government in the past, and has wrought unabated and incalculable damage to communities and the environment? I weep whenever I remember the utter destruction brought by nickel mining operations in Sta. Cruz, Zambales, the hometown of my foster mom.
Also, we should ask: is mining a crucial sector for long-term growth and development? I don’t think so.
Remember that we’ve been a service-driven economy for many decades, and services primarily drive growth. Mining’s contributions to the economy are too concentrated in a very small portion of the population, and it tends to enrich corporations while not really lifting the boats of affected communities. Again, just look at the experience of Sta. Cruz, Zambales, which remains largely a poor town.
Interestingly, just as Maharlika is investing in mining, the provincial government of Palawan decided to ban small-scale and large-scale mining in the province for the next 50 years. Recall, too, that the administration of former president Rodrigo Duterte famously banned mining for good reason (although he walked back on this during the pandemic).
Finally, I don’t recall seeing mining development as a major thrust in the Philippine Development Plan 2023-2028. It seems, then, that there’s tension between Maharlika’s plans for the country and the official plan laid out by the National Economic and Development Authority (NEDA). This is yet another manifestation of how NEDA has been repeatedly sidelined in coordinating the country’s development policies.
All in all, while Maharlika’s maiden investments in power transmission and mining significantly promise some financial returns, I don’t think they outweigh the costs tremendously. I also don’t think these are particularly crucial investments that can boost the country’s long-term development. I can think of better uses of that money (e.g., in solving the education crisis).
Finally, Maharlika’s investments don’t fix the original sin, which is the government’s lack of surplus funds to begin with. Just as we economists had cautioned in 2023, Maharlika is gambling away money that we don’t have as a country.
Unless Congress repeals the law, we’re stuck with Maharlika. I hope more people will help scrutinize its future investments. – Rappler.com
JC Punongbayan, PhD is an assistant professor at the UP School of Economics and the author of False Nostalgia: The Marcos “Golden Age” Myths and How to Debunk Them. In 2024, he received The Outstanding Young Men (TOYM) Award for economics. Follow him on Instagram (@jcpunongbayan) and Usapang Econ Podcast.