The Maharlika Investment Fund was presented as a generational project: a professionally run, state-backed allocator that would compound public capital and channel it into long-term development. It would be disciplined, insulated from politics, and governed by global standards. Two years into its existence, Maharlika has produced profits, glossy strategy maps, and confident press releases. What it has not yet produced is proof.

Five months ago, the Maharlika Investment Corporation (MIC) unveiled its 2025 Strategy Map and Performance Scorecard. The document promised P34.9 billion in deployments, P1.78 billion in gross income, P1.01 billion in net income, and P4.09 billion in projected returns from its capital base. It pledged that every investment would meet a minimum 10% economic internal rate of return. It committed to governance upgrades, preparation for certification by the International Organization for Standardization (ISO), sustainability frameworks, and a “world-class” ambition by 2028.

On paper, the 2025 roadmap is impressive. On inspection, it raises more questions than it answers.

Maharlika’s balance sheet is large, lightly leveraged, and conservatively structured. Assets exceed P120 billion. Liabilities are minimal. Early profits — about P2.7 billion in its first full year — are genuine. Dividends remitted to the government are real. From a narrow stewardship perspective, capital has been preserved.

But forensic accounting does not stop at preservation. It asks: where did the returns come from?

So far, most of Maharlika’s income has been generated from low-risk placements, essentially interest earned on idle capital. To me, this looks more like treasury management than investment performance. Any large institution holding government securities in a high-rate environment would have reported similar gains. Early profitability therefore proves only one thing: Maharlika has not lost money yet, but that is not the mandate.

Optimal returns

Maharlika was not created to function as a high-yield savings account. Its charter speaks of optimal returns and national development. It is meant to take measured risk, finance productive assets, and generate long-term value beyond short-term yield. This is where the gap between rhetoric and reality begins to widen.

Consider this: A P34.9 billion deployment target producing P1.01 billion in net income implies a net yield of roughly 3%. Even gross income implies about 5%. These are modest returns. Yet the same document insists that every investment must meet at least a 10% economic internal rate of return.

Both cannot be simultaneously true in any straightforward sense.

Either the Economic Internal Rate of Return (EIRR) — a key project appraisal metric used to measure a project’s viability from a societal perspective — incorporates large, long-dated social assumptions that will not translate into near-term earnings, or deployment timing and capital staging dilute realized returns. Both may be defensible; neither is explained. Without transparency, the 10% hurdle looks more like branding than discipline.

The distinction matters because EIRR is not the financial Internal Rate of Return (IRR). In plain terms, IRR is the annualized percentage return, or what an investment is expected to earn over its entire life, taking into account how much money is put in; when the money is put in, how much comes back, when it comes back. Simply put: “If I invest P1 today, what yearly return am I really earning until I get my money back?” Suppose: You invest P100 million today, you receive P120 million after three years. The IRR is the interest rate that makes that future P120 million equal to P100 million today. In this case, it’s about 6.3% per year.

It embeds assumptions about jobs, spillovers, infrastructure benefits, and multiplier effects. These are legitimate development metrics. They are also highly sensitive to modeling choices. Slightly optimistic assumptions can inflate “economic returns” without strengthening cash flow or balance-sheet resilience.

We drew this not as a performance chart, but as a gap chart. The blue line reflects Maharlika’s public narrative — roadmaps, targets, and aspirational messaging — while the orange line shows what is independently verifiable from financials and disclosures. The contrast is telling: narrative strength remains high where evidence is thin; capital preservation stands as its strongest confirmed achievement; actual deployment has been slow; risk transparency is limited by the absence of valuation and downside disclosures; and development impact remains largely asserted rather than measured.

If Maharlika wants the public to trust this metric, it must publish the methodology. What discount rate is used? What counterfactual is assumed? How wide are the sensitivity bands? At present, none of this is visible.

Now, consider deployment risk.

Moving P35 billion in a single year represents a strategic pivot. It means shifting roughly a quarter of assets from conservative placements into active investments — transformed, but not incremental.

The early portfolio signals show concentration in politically sensitive “strategic” sectors: ports, energy, mining, and infrastructure. These are capital-intensive, heavily regulated, and exposed to policy intervention. They can be profitable. They can also become fiscal sinkholes when valuation discipline weakens.

The crucial question: Is Maharlika behaving like an institutional investor or a policy instrument? So far, the public record leans uncomfortably toward the latter.

Informing without illuminating

We see announcements, partnerships, and memoranda. We do not see detailed valuation frameworks, independent fairness opinions, or downside cases. We do not see exit strategies or portfolio benchmarks.

In global sovereign funds, this information is routine. Performance attribution, asset allocation breakdowns, and risk disclosures are standard. They exist precisely to reassure citizens that political influence has not replaced commercial logic. Maharlika’s disclosures, by contrast, inform without illuminating.

The roadmap’s governance promises are well-intentioned. A Citizen’s Charter, customer satisfaction surveys, ISO certification, sustainability frameworks, and competency standards — they all signal institutionalization. But these are process tools. They are not substitutes for investment transparency.

Good governance in sovereign investing is not measured by paperwork, but by insulation.

It is measured by whether investment committees can say no to politically attractive deals; whether pricing is benchmarked against private capital; whether conflicts of interest are disclosed in real time, and whether underperforming assets are impaired honestly.

I see none of these standards.

The source of Maharlika’s capital makes this silence more serious. Seed funding has been drawn partly from public surpluses and dividends. This is not private money. It is quasi-public wealth. Every peso has an opportunity cost — whether in debt reduction, social services, or monetary stability.

Deploying such capital requires a higher standard of proof than ordinary corporate investing. It requires radical transparency.

On development impact, the record is thinner still. Maharlika speaks of job creation, infrastructure improvement, and inclusive growth. 

These are measurable outcomes. Yet no public framework links specific investments to quantified results. Sector exposure is not impacted. Ownership is not poverty reduction. Without metrics, “nation-building” becomes mere narrative.

Supporters argue that the fund is still young. That is true. But early years determine institutional DNA. Funds that begin life as politically flexible vehicles rarely evolve into independent allocators. Culture hardens quickly.

The projected P4.09 billion return on a P120 billion-plus capital base — roughly 3% to 4% — underscores the transitional nature of the portfolio. It reflects conservatism more than catalytic ambition. That may be prudent in year one. It does not validate claims of transformative development.

Maharlika today is financially cautious and rhetorically ambitious. It preserves capital. It publishes roadmaps. It signals global alignment. But it has yet to demonstrate that it can deploy large sums into sensitive sectors while maintaining institutional-grade discipline. Trust in sovereign funds is cumulative. It is built through cycles: one bad year explained honestly; one deal rejected because pricing was wrong, and one exit executed without political interference.

So far, Maharlika offers narratives, but not a track record. It must move from narrative transparency to numerical transparency; from slogans to spreadsheets, and from promises to post-mortems.

Until that happens, Filipinos are being asked to invest in faith instead of evidence. In finance, that is never a sustainable strategy.

I welcome your views on these and other issues where decisions made in power shape the country’s economic future. – Rappler.com

My analysis is based on MIC’s published financial statements, press releases, and its 2025 Strategy Map and Performance Scorecard, as well as Republic Act No. 11954 and its Implementing Rules and Regulations. Capitalization and dividend references draw from official government disclosures. Financial ratios and implied returns are derived from reported figures. Discussion of EIRR reflects standard development-finance practices and publicly available information. This column applies forensic accounting analysis and does not constitute investment advice.