“If you were handed ₱1.26 billion in fresh capital today, where would it first go?” That was the question the Manila Bulletin asked Maharlika Investment Corp. (MIC), the country’s first sovereign wealth fund manager.

Inside the MIC’s boardroom, a capital allocation of ₱1.26 billion is less about chasing returns in isolation and more about identifying sectors that private money typically avoids but that still promise long-term economic gains.

For MIC President and CEO Rafael Jose D. Consing Jr., that balance is clearest in one sector: electrification in off-grid provinces. While this ₱1.26 billion represents just 3.6 percent of the ₱34.9 billion the corporation planned to deploy last year, its targeted impact is designed to be outsized.

Consing told the Manila Bulletin that the challenge of deploying this capital begins with a specific North Star—Ambisyon 2040.

“When we first organized MIC and assembled its initial board of directors to chart the institution’s path, our North Star was Ambisyon 2040,” the PCEO said.

Given a freshly brewed coffee, Consing briefly composed his thoughts and said MIC executives had walked back from that long-term destination to identify which industries would be essential to enable the private sector to reach those goals.

Perhaps it was the proverbial light of the North Star that made it clear for the MIC to position itself as an enabler for the private sector’s and national development—not the sole driver.

“It was not really about what we needed to do to get there, but rather what foundations we needed to lay so that the private sector and the broader market could help bring us to Ambisyon 2040,” Consing said.

Capital allocation is a game of identifying gaps where private capital is scarce but economic impact is high. That appears to be an important guide in boardroom decisions.

Consing makes a sharp distinction between different types of physical infrastructure. Toll roads, for instance, are already being pursued by major conglomerates like Metro Pacific Investments Corp. (MPIC) and San Miguel Corp. (SMC).

For such a type of infrastructure, there is “no shortage of capital that can be deployed,” Consing noted. Conversely, farm-to-market roads (FMRs), while vital, are non-revenue generating and lack the “commercial impact” required by the MIC’s mandate.

These requirements lead the MIC directly to electrification, and given the fresh fund, the MIC intends to add this to its existing investments.

Consing identified the small power utility groups (SPUGs) as the primary target for this ₱1.26 billion fund. SPUGs are units of the state-run National Power Corp. (NPC) responsible for supplying electricity to off-grid and remote areas across the country.

Currently, these areas rely on expensive diesel and bunker fuels subsidized by every Filipino consumer through the universal charges for missionary electrification (UCME) on their electricity bills.

According to the CEO, about three-fifths of the state support goes only to two SPUGs—Mindoro and Palawan. By deploying capital here, the fund targets a national fiscal drain.

He justified this allocation with a brief, striking point: “The most expensive electricity is no electricity.” This suggests that the economic loss from a complete lack of electricity is far greater than any utility price, as electricity is a critical inelastic good that people will pay for regardless of cost.

For the MIC, the social impact of electrification is quantifiable. Consing cited data showing that transitioning from darkness to light is the single most effective way to jumpstart local productivity.

“If you provide electricity for around zero to eight hours, it raises the possibility of productivity, spending, and revenues increasing by about 15 percent,” the PCEO said, adding that extending that to a full day of continuous supply accelerates this local output growth to more than 50 percent.

“Once you roll out electricity, then we believe that it is the first step towards capital formation,” Consing noted. This suggests that electrification creates the conditions for investment, business activity, and economic growth.

Further, reliable access to electricity is the first step that would allow a province to move from rudimentary farming to value-added enterprises.

This strategy strengthens national resilience, which the fund defines through energy security, food security, and logistics.

By upgrading distribution lines and catalyzing renewable energy investments, the fund aims to “wean” provinces away from “diesel dependence” and toward cleaner energy.

“Therefore, if you roll out electricity infrastructure and the private sector begins investing in renewable capacity, you can wean those areas away from diesel dependence and shift them toward cleaner, cheaper energy,” he said.

Consing noted the ₱1.26 billion capital would not merely be used for government spending, but rather for capital investment. As such, the economic gains will be more magnified.

He revealed that overall, the multiplier would likely be around “two to three” times the impact of the actual investments over a certain period.

This multiplier effect works by creating fiscal space for Filipino families. By stabilizing energy costs, the investment gives Filipinos fiscal space to spend on essential items in a consumption basket, such as food.

Further, since the MIC funds infrastructure that agencies like the NPC previously drew from the national budget, it relieves pressure on the budget. “Theoretically, it should reduce government expenditures, but increase investments,” the PCEO said.

For provinces like Palawan and Mindoro, the focus is on unlocking the “green” and “blue” economies. The former covers land-based ecosystems, renewable energy, and circular business models, while the latter focuses specifically on marine and aquatic environments, including sustainable fisheries, ocean-based energy, and marine conservation.

Mindoro has been identified by the World Bank as having “wind superhighways” that can be converted into clean electricity.

This would allow Mindoro to eventually export power to the main grid. “They can now start putting up windmills, which will help reduce electricity costs because wind is free,” the PCEO explained.

MIC recently signed a cooperation deal with key government energy agencies to modernize and rehabilitate the aging power transmission system of Mindoro Island. This aims to improve grid reliability and eventually reduce electricity subsidies shouldered by consumers nationwide.

Under the agreement, MIC will serve as a strategic investor that may help finance, acquire, rehabilitate, and upgrade Mindoro’s off-grid transmission assets currently owned by NPC.

MIC and the National Electrification Administration (NEA) also aim to tackle the looming power strains in Palawan province with an agreement signed in December 2025, aimed at improving distribution infrastructure on the island.

Investing the ₱1.26 billion in Palawan and Mindoro, which have long been chosen by MIC for the country’s infrastructure investments, allows national necessity to be linked with commercial viability.

Consing said an internal rate of return (IRR) of at least nine percent would be a decent profitability gauge, but he also stressed the equal importance of the economic investment rate of return (ERR), measuring the impact on labor and social welfare.

MIC grew its total comprehensive income by 2.3 percent to ₱2.74 billion last year from ₱2.68 billion in 2024 as business income rose despite higher expenses.

According to the PCEO, deploying the ₱1.26 billion in the energy sector promises intergenerational gains. “It’s going to have a national impact. It is significantly socially and developmentally impactful,” he said.

By turning such capital into a catalyst of rural resilience, the MIC is ensuring that the Philippines’ long-term growth is powered by sustainable capital.