HOUSE Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) warned the Maharlika Investment Fund management that entering into a deal with the National Grid Corporation of the Philippines would “legitimize its actions that were disadvantageous to the people” and would make the state investment fund “co-liable for their P200 billion disallowed expenses, which the Energy Regulatory Commission is set to rule on.”
“As with disallowed and excess collections, the ERC by right should and probably will get the NGCP to issue a refund. That’s par for course among other energy sector players.”
“Maharlika investing into the NGCP before it completes that refund would make the Fund co-liable to the public for the raw deal we got out of these disallowed expenses.”
“Most of those expenses were on advertising and other expenses that were not core to the NGCP’s business, especially since it is already a monopoly that does not need to advertise itself.”
Salceda added that making the investment before the refund is complete would “probably overprice the NGCP’s shares.”
“It would also perpetrate the already very sweet deal obtained by the NGCP in terms of its franchise tax rate, which is lower than the standard 5%, and the concession fee, which was pegged at a very low PHP to USD conversion rate of about P43 to the dollar.”
“Investing in the NGCP without taking into account the risk of equity reduction due to the probably refund would be a clear violation of Maharlika’s risk management principles under RA 11954,” Salceda, the House’s TWG chair on the drafting of the bill, added.
“State exposure to the NGCP’s shareholder value before the ERC rules on the disallowances might also influence the government’s overall predisposition on the refund, since it would definitely impact the MIF’s position.”
“In other words, until the ERC sorts this out, it’s a raw deal,” Salceda said.
Salceda added that the House tax panel will be holding briefings on collections of the NGCP’s franchise tax and the implementation of ERC Resolution No. 10, s. 2023 which prevents the franchise tax from being passed on to consumers.
