Citi awaiting Maharlika Fund investment opportunities

American banking giant Citi expressed interest in exploring potential investment opportunities in the Maharlika Investment Corp. (MIC) —the state-run firm managing the Philippines’ very first sovereign wealth fund.

“If there are opportunities within the Maharlika framework then we are very much happy to look into that as well,” Citi Philippines CEO Paul Favila said in a chance interview at the sidelines of the Indo-Pacific Investment Forum in Taguig City on Tuesday.

“Primarily to try to find potential investors into the fund and also potential good investments for the fund, both locally and abroad, depending on the objectives of the Maharlika,” Favila added.

Last month, MIC and the Bases Conversion and Development Authority (BCDA) inked a memorandum of understanding to explore investment collaboration opportunities.

MIC President and CEO Rafael Consing in February said the MIC is set to make its first investment — likely to be in the renewable energy sector — by the end of 2024.

“Citi is always looking to find ways and means for us to support the Philippines and to make sure Citi’s resources and presence will make a difference in the country,” Favila said.

The MIC serves as the primary vehicle for mobilizing and utilizing the Maharlika Investment Fund for transactions aimed at generating optimal returns.

The  MIC's responsibilities include governing and managing the MIF by the objectives and purposes outlined in Republic Act 11954, as well as other relevant laws, rules, and regulations.

The MIC is governed by a nine-member board of directors made up of the Finance Secretary as chairperson, the MIC president and CEO, the Land Bank of the Philippines president and chief executive officer, the Development Bank of the Philippines president and CEO, two regular directors, and three independent directors from the private sector.

Under the law, the Maharlika Investment Corporation has an authorized capital stock of P500 billion, P375 billion of which shall have corresponding common shares available for subscription by the national government, its agencies or instrumentalities, government-owned and controlled corporations or GFIs, and government financial institutions.

Its initial capitalization is sourced from the national government and the country’s two largest state-run banks. 

The LandBank transmitted P50 billion and the DBP P25 billion to the Maharlika Fund.

The national government will contribute P50 billion from the following sources:

• Bangko Sentral ng Pilipinas' total declared dividends
• National government's share from the income of PAGCOR Properties, real and personal identified by the DOF-Privatization and Management Office
• Other sources such as royalties and/or special assessments

The remaining P125 billion in capital shall have corresponding preferred shares available for subscription by the national government, its agencies or instrumentalities, GOCCs or GFIs, and reputable financial institutions and corporations. 

MIC is eyeing to make its first investment by the end of the year, likely to be in the renewable energy sector, as the company is finalizing its organizational structure. — DVM, GMA Integrated News