Rep. Paul Daza expresses concerns about the Maharlika Investment Fund's acquisition of a 20% stake in NGCP, citing potential conflicts of interest and regulatory challenges.
Senior Deputy Minority Leader and Northern Samar 1st District Representative Paul Daza has raised concerns about the government's purchase of a 20-percent stake in the National Grid Corp. of the Philippines ( NGCP ) through the Maharlika Investment Fund (MIF). Daza argues that this deal could create several legal issues, including conflicts of interest and uncertainty regarding institutional roles.
He points out that the transaction blurs the lines between regulator, operator, and investor, questioning how the government can effectively penalize NGCP for violations while simultaneously holding a stake in the company. Daza further expresses concern about the ERC's ability to maintain impartiality in regulating NGCP when the government, through MIF, has a financial interest in the company's profitability. He emphasizes that the ERC's role as a regulator is crucial in setting transmission rates and enforcing grid reliability standards. Allowing the government a stake in a major player like NGCP, according to Daza, could lead to 'regulatory capture.'He cites Republic Act 9136, the Electric Power Industry Reform Act, which separates the electric power industry into four sectors: generation, transmission, distribution, and supply. While generation remains competitive and open, transmission and distribution are regulated by the ERC, with the power to set rates. Daza warns that the government's acquisition of NGCP shares could result in politicization and weaken the independence of decision-making within the sector. He calls for measures to ensure strict independence and impartiality within regulatory bodies, transparency in all regulatory decisions, including public disclosure of rate-setting processes, and firewalls between MIF and NGCP's management decisions. Daza stresses the importance of congressional oversight to prevent a potential fiasco in this critical sector
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