Analysts laud Maharlika plan to invest in NGCP

A PLAN by the Philippines’ first sovereign wealth fund to invest in the state-owned power grid makes both economic and security sense, analysts said.

“Government investment in the National Grid Corp. of the Philippines (NGCP) is a good first move,” Calixto V. Chikiamco, Foundation for Economic Freedom (FEF) president, said in a Viber message on Monday.

NGCP is the sole and exclusive concession and franchise for the operation of the country’s power transmission network.

Mr. Chikiamco said NGCP should not have been privatized since it’s a public utility. “Government presence in NGCP can help influence its activities toward the public good. NGCP is also highly profitable, and the Maharlika Investment Corp. (MIC) should earn from its investment.”

The presidential palace at the weekend said MIC President and Chief Executive Officer Rafael Jose D. Consing, Jr. had fully endorsed Speaker Martin G. Romualdez’s proposal for the MIC to invest in NGCP.

Mr. Consing said the fund’s investment in NGCP could lower energy costs and result in “a more reliable and resilient grid.” It could also foster public-private partnerships in the energy sector, he added.

NGCP spokesperson Cynthia Alabanza did not immediately reply to separate Viber messages sent on Sunday and Monday seeking comment.

She told the ABS-CBN News Channel on Monday funding had never been an issue for NGCP.

“You have big business then with access to funding,” she said. “Issues are really [on] the recovery from the Energy Regulatory Commission’s rate-setting, government support in the form of permitting and of course, expropriation and help with right of way.”

“The Maharlika Investment Fund’s investment in NGCP should be the first step toward removing foreign interference in the nation’s energy sector,” Terry L. Ridon, a public investment analyst and convenor of InfraWatch PH, said in a Facebook Messenger chat.

Enrico P. Villanueva, who teaches money and banking at the University of the Philippines Los Banos, said the plan is good for the economy and national security.

“Returns are good, and we need a close watch on the grid,” he said in a Facebook Messenger chat. “I support the investment in terms of purchase of shares precisely because of concerns about NGCP ownership,” he added.

“It should focus on buying out the shares of the State Grid Corp. of China, or significantly dilute its shares to reduce Chinese influence in NGCP’s management and operations,” he added.

Two Filipino companies — Monte Oro Grid Resources Corp. and Calaca High Power Corp. — each has a 30% stake in NGCP. The State Grid Corp. of China has a 40% interest.

It has been 15 years since NGCP got its franchise “and power deficiency problems still occur partly or largely due to transmission problems,” Bienvenido S. Oplas, Jr., president of think tank Minimal Government Thinkers, said in a Viber message.

“The MIC has political muscle and government signature that can match the political clout and muscle of NGCP being the only remaining private monopoly nationwide and has China government clout,” he said.

He added that removing the influence of China’s state-owned power company from NGCP is needed now more than ever amid souring Philippine relations with its neighbor over their South China Sea dispute.

On the other hand, Ateneo de Manila University economics professor Leonardo A. Lanzona said NGCP does not need the MIC’s investment.

“The NGCP is a private firm that was given a franchise to take care of the country’s energy and grid needs,” he said in an e-mail. “Why should the government now be involved? Is it not the responsibility of NGCP to take care of its resources and to increase it when needed?”

Mr. Lanzona said the state should fund energy-related projects in other ways.

“It is interesting how the MIC has evolved from being a sovereign fund into an investment fund into a development fund and now to an energy fund,” he said. “The way its managers are talking about it is as if there is no cost involved in spending these funds.”

The Partido Manggagawa also opposed the planned investment.

“We have consistently opposed the creation of MIC, and witnessing public funds being diverted to support an unsound investment proposal only strengthens our opposition,” it said in a statement. — Kyle Aristophere T. Atienza, Luisa Maria Jacinta C. Jocson and Jomel R. Paguian