Senators in disbelief over NGCP’s income: ‘We’ve been had’
MERALCO / JUNE 19, 2022 Linemen replaces cable on electric posts along United Nations Avenue in Manila. The country’s grid operator, National Grid Corp. of the Philippines (NGCP), raised a red alert in Luzon on Saturday due to insufficient power supply, which briefly affected electricity services to over 1 million customers in Metro Manila and adjacent provinces, the Department of Energy said. NGCP lifted the red alert at 5:30 p.m., shifting to yellow alert, which lasted until 11 p.m. on Saturday. INQUIRER PHOTO / RICHARD A. REYES
MANILA, Philippines— Data from the country’s power grid operator confirmed senators’ earlier claim that most of its profits went to the pockets of its shareholders.
The National Grid Corporation of the Philippines (NGCP) though explained that their profits are taken from “retained earnings which have accumulated over the years.”
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At the resumption of the Senate committee on energy’s hearing on Wednesday, its chairman, Senator Raffy Tulfo, pursued his questions about NGCP’s financials statements, particularly between 2014 to 2019.
NGCP Assistant Corporate Secretary Ronald Dylan Concepcion reported that in 2019, the firm earned P20.30 billion – P15 billion of which was divided among shareholders.
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He pointed out that its capital outlay (CO) for that year was P39.36 billion.
Still, Tulfo noted the P15 billion dividends represent 75 percent of NGCP’s net income and only 25 percent would only go for development projects.
Meanwhile, opposition Senator Risa Hontiveros noted the P15 billion income was 51 percent of the P39.36B billion CO, which she said is a “stunning rate of profit” by industry standards.
But Concepcion noted that since the NGCP is a regulated entity, its revenues are capped.
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“We can’t even go beyond what the ERC ( Energy Regulatory Commission) prescribes,” he pointed out.
Hontiveros then asked if that 51 percent income “as compared to the capital outlay” was within the regulated cap of the ERC, to which Concepcion answered yes.
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“Stunning, amazing,” the senator said, adding there is really need to review the Electric Power Industry Reform Act of 2001 (Epira).
For 2017, NGCP reported a net income of P20.6 billion and declared dividends of P19 billion.
Concepcion said P16 billion was for the capital outlay.
“Mapapa-sana all ka na lang,” Tulfo quipped, after noting that the P19 billion that went to the share holders was 99 percent of the company’s income.
Even more surprising for the senator was the P24 billion payouts to investors in 2014 when its only declared income was P22 billion.
“Negative pa sa net income?” Tulfo asked.
It was NGCP spokesperson Atty. Cynthia Alabanza who answered the questions based on how it was also explained to them.
“Our profits or dividends are taken from retained earnings which have accumulated over the years so it’s not a one is to one po,” Alabanza said.
“Kung ano yung deneclare for this year does not necessarily come solely from the profits earned for that particular year, so accumulated po yan over the years, so the number may or may not match,” she further said.
Tulfo was not satisfied with the explanation.
“We’ve been had. We’ve been had. Naloko po ang taumbayan dito. Naloko yung ating pamahaalan,” he said, echoing Hontiveros’ statement that it is about time to review the Epira law.
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