Senators on Wednesday, May 24 expressed their disappointment after officials of the National Grid Corporation of the Philippines (NGCP) confirmed earlier claims that most of its profits went to the pockets its stockholders.
This was bared by NGCP Assistant Corporate Secretary Ronald Dylan Concepcion during the Senate Committee on Energy hearing chaired by Sen. Rafael “Raffy” Tulfo.
In his report to the committee, Concepcion said NGCP earned P20.30-billion in 2019 and the P15-billion was divided among shareholders. Its capital outlay for that year was P39.36-billion.
Tulfo noted that the dividends represent 75 percent of NGCP’s net income and only 25 percent is left for development projects.
For Sen. Risa Hontiveros, the P15-billion income is a “stunning rate of profit” by industry standards.
Concepcion, however, said the firm’s revenues are capped since NGCP cannot “go beyond what the ERC (Energy Regulatory Commission) prescribes.”
To this, Hontiveros cited “there is really a need to review” the Electric Power Industry Reform Act of 2001 or the EPIRA law.
For 2017, Concepcion said the NGCP posted a net income of P20.6-billion and declared dividends of P19-billion. But P16-billion was for capital outlay.
“Mapapa-sana all ka na lang (You’d just be prompted to say you wish you can benefit from it too),” Tulfo said upon hearing the P19-billion were divided among the shareholders, which is 99 percent of their income.
But Tulfo was more surprised when officials said NGCP had P24-billion payouts to investors in 2014, when its declared income was only P22-billion.
To this NGCP spokesperson Cynthia Alabanza explained that the company’s profits or dividends “are taken from retained earnings which have accumulated over the years.”
“So it’s not one is to one po…Kung ano yung dineclare for this year does not necessarily come solely from the profits earned for that particular year. So that is accumulated over the years, the number may or may not match,” Alabanza pointed out.
An exasperated Tulfo, then said: “We’ve been had. We’ve been had!”
“Naloko po ang taumbayan dito. Naloko po yung ating pamahalaan (The people are fooled here. The government is also fooled) ” Tulfo said.
Also during the hearing, Alabanza apologized for the delayed projects of the NGCP which was blamed for the recent power outages that hit parts of the country.
“I’d like to clarify and express our apologies for the delayed projects…we admit that there are indeed delayed projects,” Alabanza said, addressing the concerns of Sen. Sherwin Gatchalian through Senate Resolution No. 616.
“But we are finding ways to address that. We are hoping to energize a second one by today. We are also praying that we can give you some goods news,” she said.
She said that despite the NGCP’s best efforts, delays in the completion of certain projects could not be avoided due to the Covid-19 pandemic as construction works had to be temporarily suspended due to quarantine regulations.
But even when restrictions were eased, NGCP could not fully resume work on the projects because of health and safety protocols, she said.
In an interview after the hearing, Hontiveros said the members of the Senate energy panel are determined to pursue the filing of a bill initiating amendments to the EPIRA law, particularly on "carving out" the systems operations of the national grid from the NGCP.
Hontiveros said the Senate will pursue a measure that would make sure an independent, government entity, and possibly non-profit organization, will run the country’s lone power grid.
“The ball is running na, and we will take that seriously. Because we want a result that will make sure that consumers will benefit from cheaper electricity and to electrify the whole nation and lastly, one that will ensure the future role of electric cooperatives in the Philippines,” she said.
Hontiveros maintained that the 40 percent stake of the State Grid Corporation of China on the country's grid is a real "national security risk."
"The issue here is trust and confidence. Trust, especially on issues of national security and also on their poor performance and their inability to complete their projects," she pointed out, including projects certified by the Department of Energy (DOE) in its transmission development plan.