HOUSE Ways and Means Chair Joey Sarte Salceda (Albay, 2nd District) has cautioned the Maharlika Investment Fund (MIF) against entering a deal with the National Grid Corporation of the Philippines (NGCP), citing concerns over unresolved financial issues that could harm public interest.
Salceda warned that such a partnership would not only “legitimize actions that were disadvantageous to the people” but also make the MIF “co-liable for NGCP’s P200 billion in disallowed expenses,” which the Energy Regulatory Commission (ERC) is expected to rule on soon.
“As with other disallowed and excess collections, the ERC has the right to order the NGCP to issue a refund. This is standard practice among energy sector players,” Salceda said.
He emphasized that investing in NGCP before it issues the refund would unfairly burden the MIF with liabilities. “Such a move would make the Fund co-liable to the public for the raw deal we got out of these disallowed expenses,” he noted.
Salceda pointed out that many of the disallowed expenses were related to advertising and other non-essential activities. “These are expenses that are not core to NGCP’s business, especially given its monopoly status, which eliminates the need for self-promotion.”
He also raised concerns about the valuation of NGCP’s shares. “Investing in the NGCP before the refund is completed could lead to overpriced shares. It would also perpetuate the very favorable terms NGCP has enjoyed, such as a franchise tax rate lower than the standard 5% and a concession fee tied to a low PHP-to-USD conversion rate of P43 to the dollar.”
Salceda warned that such an investment would violate Maharlika’s risk management principles under Republic Act No. 11954. “Ignoring the risk of equity reduction due to the potential refund would clearly breach the Fund’s mandate to safeguard public funds.”
He also expressed concerns about the broader implications of state exposure to NGCP’s shareholder value. “Investing in NGCP before the ERC resolves the issue might influence the government’s stance on the refund, creating a conflict of interest that could harm public trust.”
“In other words, until the ERC sorts this out, it’s a raw deal,” Salceda concluded.
He further announced that the House tax panel would hold briefings on NGCP’s franchise tax collections and the implementation of ERC Resolution No. 10, series of 2023, which prohibits passing the franchise tax onto consumers.