Philippine Fund to Invest $337 Million in China-Backed Grid Firm

The Maharlika Investment Corporation (MIC), the Philippines' first sovereign wealth fund, is set to invest PHP19.7 billion ($337 million) in the National Grid Corporation of the Philippines (NGCP), marking a significant step towards increasing government influence over the country's power grid operations. The investment, announced on Monday, January 27, 2025, will give MIC a 20-percent stake in NGCP, which is currently 40-percent owned by the State Grid Corporation of China (SGCC).

The investment will be made through the purchase of preferred shares at PHP15 each from Synergy Grid and Development Philippines Inc. (SGP), a key stakeholder in NGCP. The preferred shares come with a guaranteed dividend yield of over 6.5 percent for the first three years of the investment. After the initial three years, the investment could be converted into common shares, giving MIC greater flexibility and control over its stake in NGCP.

The acquisition will give MIC two board seats each in the SGP and NGCP, allowing the government to have a greater say in the operations and decision-making processes of the country's lone power transmission network. This could lead to better coordination between the Department of Energy (DOE) and NGCP, potentially speeding up the interconnection of the power grid across the archipelago.

The investment is part of MIC's maiden investment, which is expected to be finalized and signed within the next 90 days. The deal comes as the Philippine government seeks to regain greater influence over the nation's critical power infrastructure to ensure that every Filipino has access to reliable and affordable power.



The investment in NGCP is part of the Philippine government's broader economic and geopolitical strategies, which aim to improve the country's infrastructure, ensure energy security, and diversify its economic partnerships. By investing in NGCP, the government seeks to ensure reliable and affordable power supply, which is crucial for economic growth and development. At the same time, the investment aligns with the government's goal of achieving energy independence and reducing dependence on imported fossil fuels.

The investment also presents an opportunity for the Philippine government to maintain a balance in its geopolitical relations. By engaging with China economically, the government seeks to mitigate potential tensions and maintain a stable relationship with its largest trading partner. At the same time, the government continues to maintain close ties with the United States and other Western countries, ensuring that it is not overly reliant on any single partner.



In conclusion, the Philippine government's investment in the China-backed National Grid Corporation of the Philippines (NGCP) aligns with its broader economic and geopolitical strategies of infrastructure development, energy security, economic diversification, geopolitical balance, and sovereign wealth fund management. The investment presents both potential benefits and risks for the Philippine economy and energy sector in the long term, including increased government influence, additional capital for NGCP, diversification of ownership, debt burden, political interference, dependence on Chinese technology, and potential impact on energy prices. By diversifying its economic partnerships and investments, the Philippines can reduce its dependence on a single power or economic partner, maintain good relations with multiple powers, and promote transparency and sustainability in its infrastructure development efforts.