MIC President and CEO Rafael Consing (Photo from the Facebook page of the Department of Finance)
MANILA, Philippines — Maharlika Investment Corp. (MIC) president and CEO Rafael Consing Jr. on Saturday said he was fully backing the proposal of Speaker Martin Romualdez to invest money from the country’s first sovereign wealth fund in the National Grid Corp. of the Philippines (NGCP).
Romualdez on Friday said a “strategic investment” by the MIC in the NGCP would upgrade the country’s energy infrastructure and lower electricity rates.
Consing pointed out that the NGCP was the backbone of the country’s power system and “its stability is inextricably linked to the Philippines’ economic and social well-being.”
The speaker made the proposal in the wake of the nearly four-day outage that blacked out Panay and Guimaras Islands and parts of Negros last week.
“I fully endorse Speaker Martin Romualdez’s proposal for the Maharlika Investment Corporation to strategically invest in NGCP. This move holds immense potential to strengthen our energy sector and pave the way for a brighter future,” Consing said in a statement released by Malacañang.
Ownership
The NGCP is a private company that holds a 25-year concession contract with the government and a 50-year franchise to operate the country’s power transmission network granted by Congress in 2008.
The State Grid Corp. of China owns 40 percent of the company while tycoons Henry Sy Jr.’s Monte Oro Grid Resources Corp. and Robert Coyiuto Jr.’s Calaca High Power Corp. each own 30 percent.
President Ferdinand Marcos Jr. on Friday said the NGCP was accountable for the Western Visayas blackout as it was tasked with ensuring grid stability, which it failed to perform.
Tackling challenges
Consing said an investment in the NGCP would allow the MIC, which manages the Maharlika Investment Fund (MIF), to become a dedicated partner of the power transmission company in tackling the country’s complex energy challenges.
The tangible benefits that could come out of the partnership include lower energy costs, he said.
The MIC “can leverage its unique financial resources and development expertise to accelerate critical infrastructure upgrades, promote renewable energy integration, and improve overall grid efficiency,” according to Consing.
The MIC board met for the first time only last week, six months after the controversial MIF and the company that will manage it were created by law.
‘Investing in future’
Consing said the investment could foster public-private partnerships in the energy sector that could “set a valuable precedent for sustainable development across other critical infrastructure areas.”
But he acknowledged that the decision to invest would require careful consideration and thorough due diligence.
“Transparency and accountability must be paramount throughout the process to ensure efficient use of public funds and maximum benefit for the nation. However, the potential rewards are well worth the exploration,” Consing said.
“Investing in NGCP through Maharlika is about investing in the Philippines’ future,” he added.
Two Makabayan lawmakers strongly opposed the Speaker’s proposal, saying it would just be “blindly” investing in the “inefficient” company.
The government should audit the NGCP’s performance and transactions, and review its franchise instead of gambling in an “indeterminate” investment, they said in separate statements.
“Rather than put people’s funds into the Maharlika Investment Fund and then blindly invest in the inefficient NGCP, we call to assess its performance as expected from its franchise, audit its transactions, and probe into its ownership,”
Manuel noted that the Makabayan bloc vehemently opposed the MIF from the start, saying that it “gambles the people’s funds for indeterminate investments that will benefit cronies and favored companies.”
“Maharlika investing in the NGCP, a private grid corporation owned by China and two Filipino billionaires, will only line the pockets of the rich and the powerful amidst its role in the Western Visayas blackouts,” he said.
Like Manuel, ACT Teachers Rep. France Castro also pushed for a congressional review of the NGCP’s franchise.
“The NGCP lacks transparency on the issue of transmission rates and the impact on national security of China being the largest stockholder of NGCP,” the House deputy minority leader said.
She said China’s role in the NGCP “cannot be trivialized,” noting that four of the 10 members of its board represented only one Chinese company, and that the Asian superpower “was a threat and the public must be informed about this.”
Probe to take months
“The NGCP may claim to be a private company. But since its business is imbued with public interest, it must be scrutinized by government, including the Commission on Audit and Congress, especially since the public pays for their expenses and profit through their transmission rates,” Castro said.
She pressed the Energy Regulatory Commission (ERC) to publish its latest audit of the NGCP’s rates and income.
The ERC said it would take about six to eight weeks to finish the investigation of the Panay blackout by its interim grid management committee, the same amount of time it took for the panel to conclude its probe of a similar outage in April 2023, also in Panay.
ERC Chair Monalisa Dimalanta said there could be sanctions “against NGCP or whoever else is accountable,” including power plant operators.
Under its franchise and under the Electric Power Industry Reform Act of 2001, the NGCP’s job is “to ensure the safe and reliable operation of the grid,” she said.
She pointed out that NGCP was mandated to handle system operations, contrary to the corporation’s earlier statement that its services were only confined to power transmission.
The specific sanctions would be determined after the probe, Dimalanta said.
Sen. Sherwin Gatchalian, vice chair of the Senate Committee on Energy, said the failure in the management of the country’s power outlook should be sufficient ground for the government to consider revoking the NGCP’s franchise.
If the NGCP’S negligence could be proven, it must be made to pay for the losses suffered by the affected areas, Gatchalian said in an interview with dwIZ radio on Saturday.
Power plants that made unscheduled shutdowns were also liable, he said.
According to the senator, the NGCP should be penalized with an amount that “will be painful and will be felt” by the company.
Gatchalian lamented that the outage in Western Visayas had taken most of its toll on small businesses, such as hotels and restaurants, which were still recovering from losses wrought by the COVID-19 pandemic.