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MIC, boon for Phl?
by: Senen L. Matoto, FICD
ICD Trustee
Institute of Corporate Directors
Foreword:
Mr. Senen Matoto talks about Dr. Bernando Villegas’ predictions on The Maharlika Investment Corporation which was discussed at an Institute of Corporate Directors seminar. The discussion included the country's economic condition, as well as potential strategies to boost the percentage of the country's economy. Dr. Bernardo Villegas, the speaker, offered his thoughts on MIC. Furthermore, Dr. Villegas has emphasized that it is advisable to invest in infrastructure such as terminals, particularly in tourist destinations, and that our country ought to capitalize on other crops in to attain an 8 to 12 percent growth rate.
The country’s growth prospects are bright, notwithstanding the temporary dip to 4.7 percent in the 2nd quarter GDP. The Implementing Rules and Regulations of the Maharlika Investment Corporation or MIC is finally out, and there are no surprises as it hews quite closely to its governing law, Republic Act 11954. In a recent forum organized by the Institute of Corporate Directors, Dr. Bernardo Villegas, one of the country’s foremost economists and undoubtedly the country’s most listened-to prophet of boom, expounded on the various aspects that we should be most hopeful about MIC, perhaps enough to silence its bitterest critics. And what are Doc Bernie’s prognostications? The country’s growth prospects are bright, notwithstanding the temporary dip to 4.7 percent in the 2nd quarter GDP. He believes the 6-7 percent administration target is very doable but still low given the ultimate Ambisyon 40 of zero poverty with all Filipinos free from hunger and poverty, where there are no homeless, and all are living healthy and peaceful lives. He is calling for an 8-12 percent growth rate, but some critical must-dos are needed to achieve this. The country needs to boost the agriculture industry several notches higher. The low productivity of the agricultural sector, as manifested by the price volatility of various staple commodities brought about by intermittent lack of supply requiring importation, clearly makes it a prime candidate for some massive infusion of capital to consolidate large tracts of farmland and create corporate agricultural estates and achieve economies of scale using the latest sustainable agricultural productivity tools, and to diversify production beyond bananas, pineapple and coconut into much in demand other food crops such as cacao, coffee, avocados and mangoes, and for higher value-added, to integrate further into food processing. He cites that it can be done sustainably and responsibly, for example, Lionheart Farms in Palawan, which scored 4.79 out of 5 in the UN Sustainable Assessment for Food and Agriculture. As far as rice is concerned, it is high time that we recognize that 100 percent sufficiency is a pipe dream, and a deliberate hybrid policy of production and importation must be implemented, given our archipelagic country. But this is premised on BBM flexing his presidential muscles to ensure that the government’s different line departments that have direct or indirect influence over the fate of our agriculture sector, such as the DA, DTI, DENR, DILG, and vested industry interests, are in sync and made to toe the line. Another critical investment opportunity is infrastructure such as roads, bridges, trains, subways, and airports to lure visitors to the country’s tourist destinations, such as Palawan, recently adjudged as the best beach island destination in the world by travel publications.
Infrastructure will require massive investments that cannot be funded solely by the government or our local conglomerates. Foreign investments will be necessary, which Doc Bernie estimates can realistically be about $15 billion annually, given the magnitude of high-yielding infrastructure opportunities. He cites the proposed link from Cavite to Corregidor to Bataan, where financial simulations show an impressive internal rate of return of about 30 percent. Although recent legislation has now allowed 100 percent foreign ownership in infrastructure, any prudent strategic investor would surely prefer having a government-owned investment fund such as MIC to be a minority partner, which presumably can help navigate the perennial turbulent common obstacles of right of way encountered by other infrastructure projects. Underlining these critical concerns, however, is the administration’s political will to ensure the cooperation of the various local government units in allowing the smooth implementation of these projects, particularly infrastructure where entrenched vested political interests interfere for self-serving motivations or are just incorrigibly incapable of practicing sensible good governance. Simply put, BBM should crack the whip to get the mayors and governors in line if need be. But perhaps the most important admonition of Doc Bernie to good governance watchdogs is on integrity and to be vigilant about corruption. Within the next few weeks, MIC will slowly come to life with all eyes watching it, and indeed, a high-profile cast of the board of directors and key officers will be assembled. Dr. Villegas has laid out a clear roadmap for the MIC. They should be able to set an example in governance, lead the way, and be true to MIC’s reasons for being. Until next week… OBF! Disclaimer:
On September 13, 2023, “The MIC, boon for Phl?” was published at the Daily Tribune. It was authored by Senen “Bing” L. Matoto, a Trustee of the Institute of Corporate Directors’. You can read more about this article through this https://tribune.net.ph/2023/09/12/mic-boon-for-phl/
