Senators on Wednesday chided the National Grid Corporation of the Philippines (NGCP) for allocating to its shareholders a whooping P15 billion from the agency’s P20-billion earnings, saying this should have been used for their projects that will redound to the benefit of their consumers.
During the Senate Energy Committee hearing chaired by Sen. Raffy Tulfo, NCGP said it posted a net income of P20 billion in 2019.
Tulfo noted that 75 percent of NCGP’s earnings went to the dividendsof shareholders instead of going to development or re-investing for its growth.
“The profit for transmission is only in the Philippines,” the senator pointed out, adding the private firm’s owners are “of amazing wealth.”
But lawyer Ronald Dylan Concepcion, NGCP Assistant Corporate Secretary, stressed the power firm has a budget allocation for their projects.
He related the firm has P39 billion in capital outlays, which came from different sources.
“We also have bank loans that we poured into our projects,” said Concepcion.
But Tulfo emphasized NGCP had given even higher dividends to their shareholders during the past years.
In 2017, he said NGCP’s net income was P20.6 billion, with P19 billion going to dividends. In 2015, its net income was P22.5 billion – with P21 billion going to dividends.
However, senators were surprised on learning that in 2014, NGCP earned P22 billion but shareholders received P24 billion in dividends.
NGCP spokesperson Cynthia Alabanza explained that their profits are taken from retained earnings over the years and do not come solely
from profits earned from that particular year.
“That’s accumulated, so the numbers may or may not match,” she said.
The hearing also revealed that NCGP has for a long time been exacting payment from consumers although its projects were delayed.
Sen. Win Gatchalian, chairperson of the Senate ways and means committee, cited the need for discipline among power industry players,
as there are already prevailing penalties for breaking laws.
He also questioned why NGCP’s concession fees and corporate taxs NGCP were being passed on to the consumers.
Sen. Risa Hontiveros likewise criticized NCGP for giving dividends to shareholders even if their projects are yet to be completed.
Alabanza, a lawyer, was very apologetic.
“I know it sounds as if we have many excuses for the delayed projects.
But the reality is that we do suffer both internal and external delays. If delayed, it does not mean we do not want to finish the
projects,” she said, adding the power firm has been encountering several challenges.
She mentioned the difficulty in securing a right of way for their projects.
Energy Regulatory Commission Chairperson and CEO Mona Dimalanta said they are studying the possible punishment of energy providers for
failure to comply with their promises.
“They’re not just fines, also imprisonment. We are studying how to go about more severe penalties if deserved,” stated Dimalanta.