Maharlika backs proposal to tap fund for energy diversification

By Justine Irish D. Tabile, Senior Reporter

MAHARLIKA Investment Corp. (MIC) said it is open to a proposal raised during a House hearing to tap the sovereign wealth fund for energy diversification as fuel supply risks rise.

“We fully welcome and support the policy direction and recommendations raised during [Wednesday’s] House Committee on Ways and Means hearing,” MIC President and Chief Executive Officer Rafael D. Consing, Jr. said in a Viber message to BusinessWorld late on Wednesday.

“Tapping the Maharlika fund for energy diversification perfectly aligns with our mandate to invest in critical infrastructure that drives sustainable, long-term national development,” he added.

A lawmaker on Wednesday asked the Department of Economy, Planning, and Development (DEPDev) about the possibility of tapping the Maharlika fund for energy diversification.

DEPDev Secretary Arsenio M. Balisacan said the MIC has already invested in the energy sector, particularly in transmission.

“I think (yes), of course, if it meets the objectives of Maharlika, that is, it must be sustainably profitable,” he said.

“And I think that industry is quite profitable, so it should be a good project,” Mr. Balisacan said during the hearing.

The Philippines remains heavily dependent on fossil fuels, with renewables accounting for 26% of the power generation mix, close to the government’s 35% target by 2030.

As a net importer of crude oil, largely sourced from the Middle East, the country remains exposed to global price volatility.

Mr. Consing said energy security and diversification are among MIC’s priority sectors.

“Currently, due diligence and technical studies are ongoing for our purchase and upgrade of the distribution system in Mindoro, which is targeted to be completed by the end of 2027,” he said.

“Meanwhile, we have entered into an agreement with the Palawan Electric Cooperative (PALECO) to undertake a project in Palawan,” he added.

He said the rollout of upgraded island grid infrastructure and distribution networks in these areas is expected to catalyze private power generation.

In particular, he said the initiative will help deliver reliable electricity to over 2.6 million residents, reduce reliance on diesel and bunker fuel generators, and wean off-grid areas from the Universal Charge for Missionary Electrification subsidy, among others.

“I think the point about energy diversification is very critical, and we should explore many ways. But at the same time, engage the private sector to be a key driver for that because of the massive investment requirements,” Mr. Balisacan said.

Private sector groups welcomed the proposal, citing their expertise and capital as key to advancing energy diversification.

Jose Rene D. Almendras, private sector representative to the Legislative-Executive Development Advisory Council, said such initiatives are well-suited for public-private partnerships.

He said the private sector has advantages in terms of expertise, capital, and long-term maintenance.

Management Association of the Philippines President Donald Patrick L. Lim said the private sector must play a central role in diversifying the country’s energy mix.

“Government alone cannot move fast enough or invest at the scale required. The private sector has the capital, technology, and operational capability to accelerate renewable energy, energy efficiency, battery storage, and even emerging technologies such as liquefied natural gas and nuclear,” he said in a Viber message.

Instead, he said the government’s role is to create “the right environment by speeding up permits, ensuring policy consistency, modernizing the grid, and giving investors the confidence to commit long term.”

“If we want real energy security, this has to be a true public-private partnership,” he added.

Meanwhile, Philippine Chamber of Commerce and Industry President Ferdinand A. Ferrer said the private sector’s strengths include innovation, technology, and networks.

“It is an opportune time for the private sector and government to work hand in hand in finding and implementing solutions to this crisis,” he said in a Viber message.

The country was placed under a one-year state of national energy emergency on March 23, giving the government expanded powers to shield the economy from surging oil prices triggered by the war involving Iran, Israel, and the US.

Oil companies implemented another round of pump price increases this week, with diesel rising by P15 to P19.80 per liter and gasoline by P1.50 to P5.90 per liter.

As a result, diesel prices may climb to as high as P172 per liter, while gasoline could near P120 per liter.