Probe on NGCP's alleged Anti-Dummy Law violations sought

House ways and means panel chair, Albay Rep. Joey Salceda, has called for a probe on the National Grid Corporation of the Philippines (NGCP) over its supposed violation of the country’s Anti-Dummy Law.

During Tuesday’s public hearing before the House ways and means panel, Salceda questioned NGCP’s ownership structure and compliance with constitutional restrictions on foreign ownership of public utilities.

NGCP is 60% owned by Synergy Grid of the Philippines (SGP) while State Grid Corporation of China (SGCC) has 40%.

“While the NGCP has denied that it is controlled by the [SGCC], and that it has no executives that are Chinese nationals, its Chairman is Chinese, a top official of the SGCC, despite (SGP) supposedly being a larger shareholder than the [SGCC],” Salceda said.

The Anti-Dummy Law (Commonwealth Act No. 108, as amended) prohibits non-Filipino nationals from participating in the management, operation, administration, or control of an entity engaged in a nationalized or partially nationalized activity.

Likewise, Salceda said that based on the SGP's Philippine Stock Exchange submissions, SGP has foreign shareholders such as American, Chinese, Malaysian, and Iranian whose shares of stock account for 7.48% of the company’s ownership or already beyond the Constitutional limit of 40% foreign ownership of businesses since 40% of NGCP is already owned by a foreign company, SGCC.

“If the 60-40 rule will be strictly employed, SGP’s foreign ownership should be 0%,” Salceda said.

NGCP legal counsel Pia Zobel San Diego, who was present during the public hearing, asked the Committee for more time to prepare a response and present it in future hearings.

“We respectfully acknowledge Congress’ legislative power to review, refine and revise the existing legislation as well as NGCP franchise granted by the congress and...in light of the presentation made by the chairperson, we request that the NGCP be given time to submit a response to address the concerns of the committee,” San Diego said.

Salceda agreed by saying, “Okay.”

During the same public hearing, the Energy Regulatory Commission (ERC) also said that it passed a Resolution allowing NGCP to pass on its 3% franchise tax to consumers for some time.

ERC Chairperson Monalisa Dimalanta disclosed that the ERC approved NGCP’s petition in 2011 and only suspended it in 2023, and that the NGCP regularly paid its franchise tax dues.

“From 2018, NGCP paid between P1.3 billion and P1.5 billion in franchise tax every year. NGCP [also] paid a total of P21 billion in franchise tax from 2016 to 2022,” Dimalanta said.

Bureau of Internal Revenue (BIR) Commissioner and lawyer Romeo Lumagui Jr., for his part, said that the government will strictly implement BIR Revenue Memorandum Circular 24-2024 prohibiting the NGCP from passing on the franchise tax to consumers.—VAL/RF, GMA Integrated News