NGCP defends expenses as Hontiveros questions alleged pre-election spending spikes

Senator Risa Hontiveros on Thursday flagged what she described as spikes in the National Grid Corporation of the Philippines’ (NGCP) expenses for advertisements, public relations, and entertainment just before the past three election periods.

The NGCP, however, maintained the legitimacy of these expenses, saying these accounts were already existing even before they took over the grid operations in 2009.

During the Senate energy committee hearing on Thursday, Hontiveros pressed the Energy Regulatory Commission (ERC) to answer whether these public relations expenditures were passed on to the consumers.

The senator previously revealed that the NGCP spent over P1.121 billion on advertisements, public relations and corporate social responsibility (CSR), and entertainment for the years 2017 and 2018.

The lawmaker bared that from 2009 to 2020, the NGCP spent P1.454 billion on representation and entertainment; P1.032 billion on advertising; P1.268 billion on public relations; and P646 million on professional fees, based on the Annual Audited Financial Statements filed by the NGCP with the Securities and Exchange Commission (SEC).

Hontiveros asked if these accounts are directly related to the main business of the NGCP, which is to operate the power grids in the country.

She put emphasis on her observation that the expenses “jumped immediately” in 2013, 2016, and 2019, which are all election years.

“Sino ang ine-entertain nila?” Hontiveros asked. [Who are they entertaining?]

ERC chair Agnes Devenadera, in response, said she cannot give any opinion as she is not privy to the details of the expenses.

But she noted that some of the expenses from the previous years were already disallowed for the “purposes of reset.”

She also explained that these expenses were not passed on to the consumers as these are not “prudent and necessary expenses” that are considered in determining the power rates.

“It cannot be considered for determination of the rate and of course, will never be passed on the consumers,” she said.

Unsatisfied with the ERC's answer, Hontiveros said she cannot help but conclude that the consumers are “footing the bill” for these accounts.

NGCP response

For their part, the NGCP, as represented by its spokesperson Cynthia Alabanza, said these expenses were already existing prior to their takeover.

“We just want to explain that when NGCP took over in 2009, we merely stepped into the shoes of [National Transmission Corporation]. All these accounts were already there and we remain faithful to the purpose for which these accounts were created and were retained by the NGCP,” Alabanza said.

She said that the expenses for the NGCP’s representation include the costs for meals for their linemen and other personnel during typhoons and other calamities; employee spending for snacks during meetings; transportation allowance; and fuel and mobilization costs during monitoring activities nationwide.

“These are all legitimate business expenses and should not be maliciously interpreted,” the NGCP presentation read.

For the advertising, Alabanza said these are expenses for educational and information materials on the dangers of high-voltage facilities, activities that may endanger lives and properties, and laws possibly violated by the public.

The NGCP also spends on the publication of information about the power situation, legal notice requirements, recruitments, and bidding process on newspapers.

Meanwhile, the NGCP conducts technical trainings, customer cluster meetings, and facility yours for the students and the media as part of its public relations activities.

“These are all bona fide and legitimate business expenses, subjected only to malicious interpretation,” the NGCP presentation read.

Its corporate social responsibility (CSR) expenses were also given to their host communities.

In their presentation, the NGCP said it has distributed 8,120 and 11,783 relief packs in 2017 and 2018, respectively.

Meanwhile, they also provided 18,322 and 9,874 emergency kits to various communities in 2017 and 2018, respectively.

Apart from that, NGCP conducted disaster risk reduction training, provided more than 700 scholarship grants in 2017 and 2018, and donated P1 billion for the COVID-19 relief and response efforts, among others.

Reacting to some wordings in NGCP’s presentations, Hontiveros said the firm could have given a seamless presentation, especially when it comes to expenses that are not fitting to their role as grid operator.

Senate energy committee chairman Sherwin Gatchalian said the panel can set a separate hearing to discuss all the compliance issues of the NGCP. — BM, GMA News