The government may take back control of the National Grid Corp of the Philippines (NGCP) if it is proven that there are national security concerns and if it’s ineffective in fulfilling its mandate, the Presidential Communications Office said on Wednesday.
The Palace issued the statement after Senator Raffy Tulfo, chairman of the Senate committee on energy, met with President Ferdinand Marcos Jr. on Monday to express his intent to investigate the situation at NGCP.
“Firstly, Senator Tulfo expressed his desire to assess the performance of the NGCP, which has also raised concerns among several other senators. Secondly, Senator Tulfo aimed to examine the security aspect, particularly on who truly controls the corporation,” the PCO said in a statement.
“The President agreed with the senator’s proposal to conduct a comprehensive study or hold hearings to determine the actual situation. If necessary, the government will take back control of the entity,” it added.
Forty percent of NGCP is owned by the State Grid Corporation of China, while the remaining 60 percent is Filipino-owned. Tulfo said the Chinese ownership “poses a serious national security threat,” considering the conflict over the West Philippine Sea.
Senator JV Ejercito also expressed concerns over the State Grid Corporation of China’s 40 percent stake in NGCP.
Senators Grace Poe, and Sherwin Gatchalian, also said the panel was open to reviewing the NGCP franchise, in view of the recurring power outages.
Senator Risa Hontiveros earlier renewed her call for the government to regain control of the NGCP.
At a hearing in the Senate, the NGCP assistant corporate secretary, Ronald Dylan Concepcion, told the Senate energy committee China’s 40 percent stake in the company did not represent a national security risk as the transmission facilities were run by Filipinos.
But Tulfo and Hontiveros refuted Concepcion’s statement, saying that information or intelligence could be passed on to Beijing, which has been hostile to the Philippines in the West Philippine Sea.
Tulfo reiterated the need to return NGCP’s ownership to the Philippine government, specifically to the National Transmission Corporation, and not to China’s state grid and private firms.
Concepcion said there were no Chinese among the NGCP employees, and that only three board members are Chinese.
“The only Chinese that are in the country that are connected to NGCP are three and these are the members of the board. They sit on the board, and they represent the shareholdings of the State Grid Corporation of China,” he said.
Concepcion also debunked reports China can remotely control NGCP’s facilities. He said former National Security Council chief Hermogenes Esperon Jr. had already inspected their facilities in 2019 or 2020 to verify this claim.
Responding to a query about why the manuals and instructions for the NGCP equipment in their substations were written in Chinese, Concepcion said the equipment was acquired from a Chinese provider.
“The instructions to that system were in Chinese originally but also they have English translation because of course our Filipino engineers have to go through training for that,” Concepcion said.
Tulfo then asked Concepcion to “get rid of these Chinese characters” because it is insulting. Concepcion said they would comply.
Poe pointed out that Republic Act No. 9511 grants NGCP a franchise with the commitment to support the safe and reliable operation of the transmission system in the Philippines.
“The weight of its responsibility is heaviest being the sole operator,” she said, adding that a franchise is a privilege especially if it involves a natural monopoly given to a sole company.
“I would just like to remind you… we may amend, we may alter and we may repeal your franchise if it is for the common good,” Poe added.
Poe said the authorities should have acted quickly to remedy the situation to spare the people in Occidental Mindoro from blackouts.
Poe said there is a need to determine the cause of the grid disturbances in Panay Island and determine who should be held responsible — NGCP or local distribution utility Central Negros Electric Cooperative (CENECO).
She took note of the drawn-out audit of the Energy Regulatory Commission on NGCP, which began in 2019 and is still being evaluated by the commission.