Some foreign lenders are crackling up like live wires on their due diligence moves – and these have been fueling juicy speculation that a major shareholder at the National Grid Corporation of the Philippines (NGCP) could be preparing for a great selloff—so, who's about to flip the switch on their shares?
Power industry insiders are dropping hints that the rumored divestment aligns with the government’s strategic bid to secure 30 percent stake in NGCP through the Maharlika Investment Fund (MIF) - a business play that has been pushing funding pitches to banks and other financial institutions.
The bigger question also looms: is a privately-owned entity quietly maneuvering to claim a controlling stake in the company, ready to upend the game with a tactical grab?
And in this corporate chess game, who’s going to flinch first—either to cut ties or opt for partial shares offloading? Will the Chinese partner be stepping back, or are the two Filipino equity giants ready to cash out?
Currently, State Grid Corporation of China (SGCC) commands 40 percent equity in NGCP; while the remaining 60 percent rests in the hands of Filipino tycoons Henry Sy Jr. and Robert Coyiuto Jr. (with 30 percent shareholdings each) - strategically held through their companies Monte Oro Grid Resources Corp and Calaca High Power Corp, respectively.
Checkmate: right cheque or chaos?
The buzz in the sector suggests that if Maharlika or any suitor brings the right cheque to the table, shareholders might willingly part with their stakes—but should a ‘coercive capture’ be attempted, expect a storm of arbitration battles and legal crossfires to ignite.
For now, industry insiders are wagering that one of the Filipino shareholders may unload part of his equity, while SGCC may also sell down, signaling a seismic shift in NGCP’s ownership dynamics.
The power grid’s unfolding soap opera has been putting energy sector players on the edge, as any game-planned shakeup in its operations could become the tipping point that could propel the industry’s ambitious energy projects to triumph—or condemn them to collapse.
Some energy industry bigwigs have been cheering the government’s potential entry as NGCP shareholder, arguing that with a firm grip on the grid and if things are done right, the State could calculatedly untangle investor concerns and accelerate the seamless integration of new power plant projects into the system.
They further pointed out that the perennial controversy over China’s alleged remote control of the Philippine power grid could also be finally laid to rest - as the government’s participation as equity holder in NGCP would bring the transparency needed to reveal exactly how the grid is being managed and operated.
It’s worth recalling the flood of complaints hurled at NGCP over delayed transmission projects and the agonizingly slow approvals for system impact studies (SIS) as key requirement for power plant builds, primarily those in the renewable energy (RE) space —investor grievances that lingered for years although some major improvements have already been noted since last year.
Until this time, relentless calls for NGCP technical audit also echo across the corridors of power, spearheaded by key government agencies like the Department of Energy (DOE), Energy Regulatory Commission (ERC), National Transmission Corporation (TransCo) and the Power Sector Assets and Liabilities Management Corporation (PSALM). Even lawmakers have joined the charge, demanding answers to one of the industry’s most incendiary allegations: is China truly in control of the Philippine power grid?
Despite the noise, the effort has yet to bear fruit. For years, these agencies have pushed for a deep dive into the NGCP’s operations, hoping to uncover the truth behind suspicions that the control of the nation’s critical energy infrastructure may lie beyond Philippine shores.
NGCP has sternly denied the allegations, asserting that the grid is governed the grid and that operational control remains squarely in local hands. Yet, these persistent calls for transparency have been left in the dark – and in the process, that only intensified the government bodies’ determination to crack open the mystery behind the grid’s operations.
These issues, among others, are now under the magnifying glass of lawmakers who are determined to dig deeper also on other criticisms that NGCP has been nothing more than a ‘fortune fountain’ for its shareholders. They are also pressing hard to shed light on how its unadjusted tariffs since roughly 10 years ago may, in large part, be triggering the widely perceived high electricity prices being passed on to ratepayers.
NGCP entered the Philippine power industry in January 2009 when it sealed a 25-year concession agreement with the government, through the TransCo privatization process undertaken by PSALM – and with that, it secured the mandate to expand, modernize, operate and manage the country’s power grid. But in recent years, its relationship with the government has soured so dramatically that a divorce could only be the next inevitable conclusion.
The transmission firm’s saga may seem like a badly written telenovela, but with every jaw-dropping twist and cliffhanger, it’s still a must-watch show—especially for the stakeholders who are also getting stuck in the drama.
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