Raffy Tulfo, the broadcaster-turned legislator, sounded the alarm as the Philippines faced a potential power crisis in the years ahead unless new power generation plants were built.
But the senator’s warning was not about power plants and the thinning capacity as electricity demand increased with the further opening of the economy, ruined by Rodrigo Duterte’s mishandling of the coronavirus pandemic.
It is about China’s 40 percent stake in the National Grid Corporation of the Philippines (NGCP), the main artery of power transmission in the country. It delivers power from generating plants to distributors, like the Manila Electric Company (Meralco), which has the biggest consumer base with more than 7 million households.
Tulfo warned that China, which has a territorial dispute with the Philippines in the West Philippine Sea, can cripple the power supply, plunging the country into darkness and affecting households, businesses and industries.
The country could ground to a halt if the State Grid Corporation of China (SGCC), which controls 40 percent of NGCP), decides to pull the plug.
However, this is hypothetical considering that the SGCC partnership with Henry Sy Jr and Roberto Coyuito are purely commercial in nature.
In fact, SGCC has committed $9 billion to upgrade the power grid which was poorly managed and ruined by years of Communist insurgency.
There was a time in the 1990s when wide areas of Luzon were without electricity after the Communist guerrillas and other unsrupolous groups cut down transmission lines from Laguna to Bicol to sell copper wires to junk shops.
In 2001, under former president Gloria Macapagal Arroyo, Congress passed the Epira (Electric Power Industry Reform Act) law to privatize the power sector, including the National Transmission Corporation (Transco), through Psalm (Power Sector Assets and Liabilities Management Corp.)
There were at least 10 consortiums with foreign partners who expressed interest in the power transmission business.
Psalm awarded the contract to Trinatra group led by the son of mall chain owner Henry Sy. But the Monte Oro group, led by an Arroyo friend, Enrique Razon, appealed the decision and was eventually awarded the contract together with Coyuito and the SGCC.
But Henry Sy Jr eventually won the contract after buying out Razon’s 100 percent stake in Monte Oro.
Since 2008, Sy Jr, Coyuito and the SGCC have been running Transco, which was changed to NGCP.
The SGCC also had a stake in other power grids in Australia, Brazil, Portugal, and Greece, which led Chinese leader Xi Jinping to dream of connecting the world’s grid under China’s Belt and Road Initiative in 2015.
Actually, the SGCC was the only survivor in China’s march into strategic investments in the country under Arroyo.
Four other huge investments did not prosper, like the $329 million National Broadband Project with ZTE, the North Rail project, a network of banks, and a large agricultural project.
SGCC was under the radar until 2013 when China stepped its coercive activities in the West Philippine Sea, building artificial islands to assert its sovereignty claim based on its illegal nine-dash-line policy.
Before Tulfo started raising the issue on SGCC’s role in the NGCP, former senator Manuel Roxas II, who served in the Cabinet of the late president Benigno Aquino III, and former armed forces chief of staff Hermogenes Esperon, who was national security adviser under former president Duterte, had raised concerns on SGCC’s involvement on the power sector.
They were worried China could easily switch off the grid remotely, a scenario denied by the NGCP, which claimed the facilities are manned by 100 percent Filipinos.
Tulfo and other senators, like JV Ejercito, Sherwin Gatchalian and Risa Hontiveros, have been resurrecting the security concerns as tensions in the South China Sea and in Taiwan Straits rise, after the Philippines granted the US military access to its local bases, some facing the Bashi Channel across Taiwan.
They wanted the Philippine government to regain full control of the sensitive and strategic power sector and avoid potential complications in case a conflict erupts in the region.
Tulfo is not concocting scenarios. His concerns are valid but his proposals should be more practical and realistic.
The government cannot retake control of the grid. It is not ready to buy out the SGCC stake in the NGCP. It has to look for a white knight to replace the Chinese investment.
In the meantime, the government can take some security measures to protect the grid from potential harm.
But Tulfo’s concerns should not be ignored. China’s role in the country’s power sector has very serious security implications.