NEA called out for subsidies to power co-ops despite P2B unliquidated balances

MANILA, Philippines — Senator Sherwin Gatchalian on Tuesday called out the National Electrification Administration’s (NEA) continuous release of subsidies to electric cooperatives (ECs) despite around P2 billion in unliquidated balances, citing the 2019 report of the Commission on Audit (COA).

During a Senate hearing on the proposed budget of the Department of Energy (DOE) and its attached agencies, Gatchalian said NEA has violated its own memorandum that disallows subsidies to ECs with unliquidated balances.

“We took note in a report na (that) these are just the top 10 electric coops of which you released some amounts even though they have unliquidated balances. And if you total the unliquidated balance, it amounts to close to P2 billion. In short, you have violated your own memo of not releasing funds if there is still unliquidated balance,” said Gatchalian, chairman of the Senate committee on energy.

In response, Leila Bonifacio, department manager of NEA’s Accounts Management and Guarantee Department, said that most of the projects that were funded by NEA cannot be liquidated yet since these are either still ongoing or were completed but have yet to be inspected by the agency.

“Only around P200 million is due for liquidation and the rest are the bulk cannot yet be liquidated. As I have mentioned, these are still ongoing and need to be inspected and accepted,” she explained.

“There are instances that the project is different because we have several projects like SEP (Sitio Electrification Program) and resettlements so in that case, we treat these as separate projects kaya if it is a new project, nagre-release din po kami especially if this is a resettlement area,” she added.

Bonifacio also explained that because of travel restrictions due to community quarantine, NEA could not conduct a physical inspection of completed projects, prompting it to issue a new procedure for final inspection and acceptance of such projects of electric cooperatives.

“NEA issued a new procedure that will be implemented in the conduct of final inspection and acceptance to adopt the restrictions of the new normal, whereby the ECs will issue and submit a certificate of completion, energization, and final inspection and acceptance,” she said.

Gatchalian, however, stressed that this release of funds despite unliquidated balances will only lead to more unliquidated funds.

“I just want to flag the administration about this because you are also lending and giving more subsidies to electric coops. Okay lang ‘yun (That’s okay), I support the electrification, but I am worried [about] the unliquidated balance because it does not exert discipline among your constituents because no matter if they don’t liquidate or not, they can get and draw funds and this is what is happening right now,” he said.

Gatchalian then asked NEA to provide the committee on finance a detailed document showing updated information on unliquidated balances of ECs and to submit a plan on how the agency plans to liquidate the balances.

“There must be some end to this because this is a hanging issue and in 2021, we need to make sure that this does not happen again,” he said.

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