President Ferdinand R. Marcos, Jr. is open to the possibility of the government regaining control of the National Grid Corp. of the Philippines (NGCP). — PHILIPPINE STAR/MICHAEL VARCAS
THE PHILIPPINE government may retake control of the National Grid Corp. of the Philippines (NGCP), which is partially owned by a Chinese state-owned company, if needed, the Palace said on Wednesday.
Senator Rafael “Raffy” T. Tulfo, who chairs the Senate energy panel, told President Ferdinand R. Marcos, Jr. at a Monday meeting that he wants to “assess the performance of the NGCP,” the Presidential Communications Office (PCO) said in a statement.
In particular, Mr. Tulfo wants to look into NGCP’s ownership and assess how this may pose a threat to national security, the PCO said.
“The President agreed with the Senator’s proposal to conduct a comprehensive study or hold hearings to determine the actual situation. If necessary, the government will take back control of the entity,” the PCO said.
NGCP holds the sole and exclusive concession and franchise for the operation of the country’s power transmission network, which links power generators and distribution utilities to deliver electricity nationwide.
A consortium led by tycoons Henry Sy, Jr. and Robert Coyiuto, Jr. won the 25-year concession to run the country’s power transmission network in December 2007. State Grid Corp. of China (SGCC) owns a 40% stake in NGCP.
In a separate statement, Mr. Tulfo said he met with the President “to get the cooperation of different government agencies to swiftly address the issue with NGCP.”
The senator proposed to return the systems operation of the country’s transmission grid to Philippine state-owned National Transmission Corp. and leave its maintenance to the NGCP.
Senator Francis Joseph “Chiz” G. Escudero has opposed his colleague’s proposal to re-nationalize the NGCP, saying “it might discourage foreign investors” from doing business in the country.
“The renationalization of formerly owned sold state assets is a policy that the National Government should be very careful about or should be more circumspect about as it might send a wrong signal to existing and potential investors,” Mr. Escudero said in a statement.
“I don’t support it… [The] policy U-turns can be destabilizing and surely expensive.”
Calls to investigate NGCP’s operations have resurfaced amid increasing tensions between Manila and Beijing, which has been conducting expansive activities in Philippine territories in the South China Sea.
Mr. Tulfo, in his meeting with Mr. Marcos, said China’s stake in the NGCP may pose national security threats.
Citing an intelligence report, he said China has the capability to remotely access the country’s national grid and sabotage it. He noted all the instructions posted in NGCP plants about operations of sensitive equipment, including manuals, are written in Chinese characters.
At the Senate Energy Committee hearing on Wednesday, Ronald Dylan P. Concepcion, NGCP assistant corporate secretary, said only Filipino citizens are manning its substations, not Chinese nationals.
“The only Chinese that are in the country that are connected to NGCP are three, and these are the members of the board [who] represent shareholdings of SGCC,” he said.
Mr. Concepcion explained that the Chinese instructions on NGCP equipment are due to the fact that these were provided by a Chinese company. “The instructions to the system were in Chinese originally but also they have English translation [for our] Filipino engineers,” he said.
However, Senator Ana Theresia “Risa” N. Hontiveros-Baraquel said it could be possible for a state-owned enterprise to use its powers to collect intelligence about a country.
“It’s not easy to say that there’s no national security threat [when there’s] another country [with a] state-owned enterprise that has an obligation to collect information or intelligence to give to their government in Beijing about our country and even our government,” she told the hearing.
Ms. Hontiveros-Baraquel noted that China “has not been treating us as a friend” amid heightened tensions over the West Philippine Sea.
Mr. Tulfo said the Joint Congressional Energy Commission, once it convenes, will investigate the possible revocation of the NGCP’s franchise.
CAUSE OF CONCERNTerry L. Ridon, a public investment analyst and convenor of InfraWatch PH, said the fact that a Chinese state-owned firm has a stake in the NGCP will always be a cause of concern because of the country’s ongoing dispute with China.
To allay fears over possible Chinese control over the grid, Mr. Ridon said authorities should determine if the NGCP engineers operating the grid are mostly Filipinos.
“If Chinese nationals are doing work other than technical advice, this will certainly be a cause of concern,” he said in a Facebook Messenger chat.
Mr. Ridon said the country’s energy infrastructure can be vulnerable to attacks, citing the cyberattacks against Ukraine that caused a shutdown of its power systems that resulted in significant economic losses.”
“The same can happen in the Philippines if left unchecked, particularly if the government fails to determine the breadth of control of a Chinese state firm over the national grid,” he added.
Chester B. Cabalza, founding president of the International Development and Security Cooperation, said SGCC’s stake in NGCP is “more of a moral question than a legal one since Philippine authorities have suspicions and doubts over a Chinese business partnership on a critical energy infrastructure, which may impede the course of our national security.”
To ensure the security of the national grid, personnel and officials from energy infrastructure “must also be trained on national security framework aside from its regular safety protocols,” Mr. Cabalza said in Facebook Messenger chat.
“There should be a strong coordination with the defense and security sector since it entails the protection of the basic needs of the people and the country,” he added.
Mr. Cabalza also called for stronger domestic laws against espionage. — Kyle Aristophere T. Atienza and Beatriz Marie D. Cruz