THE country’s sovereign wealth fund could invest in fuel storage facilities, as the energy crisis has exposed the country’s weakness to oil shocks.
Maharlika Investment Corp. (MIC) President and CEO Rafael Consing Jr. on Wednesday said that they were in discussions with the Philippine National Oil Co. (PNOC) and the private sector to develop additional storage capacity.
“We can form a consortium with the PNOC and the private sector where they would contribute assets such as land to the consortium,” he said.
“Together with other private sector partners, we can invest in building the tank farm, while operations would be outsourced to private entities since our role is solely to provide capital.”
Current storage capacity is estimated to last “about 60 days” and utilization low at under 60 percent, Consing noted, raising concerns over the Philippines’ ability to cushion global oil market disruptions.
“With the increase in global oil prices, the cost of landed refined fuel has gone up by about 60 to 70 percent,” he added, with retailers now needing to “cash out 60 to 100 percent more in working capital” just to maintain inventory levels.
This surge in funding requirements, he said, may be preventing firms from fully utilizing available storage capacity, pointing to a broader structural issue that requires intervention from both government and financial institutions.
“We will catalyze the investment,” Consing said, emphasizing that Maharlika intended to act as a capital provider rather than an operator.
The initiative is seen as a medium-term solution that could take two to three years to implement once development begins.
Avoiding market risk
Despite its interest in strengthening petroleum reserves, Consing said they were not inclined to directly purchase or trade oil inventories due to exposure to price volatility.
If the fund were to support a strategic petroleum reserve by buying fuel stocks, it would be exposed to market risks that the institution is seeking to avoid.
Maharlika prefers to focus on infrastructure investments that can deliver stable, long-term returns while addressing critical gaps in the energy sector, Consing said.
In the longer term, he said they planned to prioritize electricity infrastructure — particularly transmission and distribution networks — to improve energy access and reduce costs, especially in areas heavily reliant on diesel power.
He noted that investments in grid infrastructure could help attract more renewable energy developers and reduce dependence on fossil fuels over time.
“We feel that given the amount of capital or limited capital that we have compared to the other sovereign wealth funds, we wanted to ensure that for every one peso that we invest, it would have the widest impact,” Consing said.
“So the way we’re doing it is we’re not investing in generation capacity, but rather we are investing in electricity infrastructure, build distribution, build the transmission, because once you do that, then you are, in fact, enabling the potential for capital formation across the entire commercial sector.”
Watch on storage capacities
As this developed, the Department of Energy (DOE) has ordered all downstream oil industry participants that own, lease and/or operate terminals or depots to regularly report their total and available storage capacities.
Mandating the submission and utilization of available storage capacity will help in responding swiftly to potential shortages, it said on Wednesday.
The DOE also authorized the coordinated use of available storage facilities by PNOC and/or PNOC Exploration Corp. to support national petroleum requirements.
It warned that non-compliance could result in appropriate regulatory action, including the cancellation or suspension of permits.
