NPC operations ‘crippled’ by financial woes, eyes ₱5-B loan from GFIs to pay bills

Metro Manila (CNN Philippines, January 30) – Amid “crippling” financial woes, the National Power Corporation (NPC) Board is trying to borrow ₱5-B from government financial institutions (GFIs) to help pay off its unpaid bills.

“To avoid rotating power interruptions in the islands and off-grid areas, we are taking steps to fund a sustainable solution to address the financial woes that are crippling the operations of the NPC,” Energy Secretary Raphael Lotilla said on Monday.

Lotilla revealed that the NPC Board and the DOE were attempting to borrow ₱5-B from GFIs, a move he said would require Special Authority from the president.

The DOE said that the NPC, a government-owned and controlled corporation (GOCC), accumulated payables worth ₱5.508 billion to the private sector – new power providers (NPPs) and qualified third parties (QTPs). This represents three to four months of unpaid billings.

“The NPC’s approved and allocated funds for its fuel expenses and subsidies for NPPs and QTPs for 2023 are insufficient to cover the requirements for the entire year. This is attributed to the increased cost of fuel,” the DOE said.

The NPC also has outstanding fuel payables of ₱1.031 billion for the operations of NPC Small Power Utilities Group (NPC-SPUG) power plants and barges under billing months Nov. 2022 to Dec. 2022.

Under the 2023 General Appropriations Act, the NPC’s NPP Subsidy was allocated ₱10.371 billion. For the operations of the NPC-SPUG, it was allocated ₱5.296 billion.

“The DOE and NPC are also working with the Development Budget Coordination Committee [DBCC] to program funds that would support NPC’s funding deficit for this year, 2023, which amounts to ₱14.205 Billion,” Lotilla said.

He added that the Department of Budget and Management had also authorized the NPC “to use the Prior Year’s National Government Subsidy which amounts to ₱1.112 Billion.”

Meanwhile, the DOE said the Energy Regulatory Commission would “act swiftly” on the NPC’s petition to raise its Universal Charge for Missionary Electrification (UCME) by an additional ₱0.15 kilowatts per hour. The UCME varies in different areas.

This petition was made to help the NCP pay its dues to suppliers and to the private sector, and to fund the GOCC's continuous operation.

If enacted, the UCME hike would likely take effect in May, officials said.

The NPC, with the help of NPPs and QTPs of the private sector, is responsible for the power generation functions in 169 off-grid areas in the Philippines.

CNN Philippines Senior Correspondent Gerg Cahiles contributed to this report.