'Cost of P62-B payout to Napocor workers to fall on consumers'

by Ryan Chua, ABS-CBN News

Posted at Dec 04 2014 01:35 PM | Updated as of Dec 05 2014 08:29 PM

MANILA, Philippines - Electricity consumers all over the country will ultimately shoulder some P62 billion in back wages and benefits to employees of the National Power Corporation (Napocor) who were found to have been illegally fired in 2003, officials told a Senate panel.

At a hearing of the Senate energy committee on Thursday, officials from the Napocor and the Power Sector Assets and Liabilities Management Corp. (Psalm) warned of higher power costs should government be compelled to pay the amount.

The Supreme Court (SC) recently put on hold its 2006 decision ordering Napocor and Psalm to give the back wages to some 9,000 employees.

If the Court eventually upholds its decision, however, Psalm President Emmanuel Ledesma said government would have to pass on the amount to consumers.

The cost of electricity may increase by 26 centavos per kilowatt-hour over a 10-year period, Ledesma said.

“National po ang effect. Babayaran ‘yan sa electricity bill ng taumbayan (The effect will be national. The people will pay it through their electricity bill),” he said.

Ledesma earlier said that should Psalm be made to pay P62 billion to the retrenched employees, it would be unable to pay for its expenses, including fuel to run power plants.

Napocor’s president and chief executive officer Ma. Gladys Sta. Rita, meanwhile, said paying the amount would badly hit the company’s operations, as well as the electricity supply in many parts of Mindanao and island provinces that Napocor services: Batanes, Romblon, Siquijor, Catanduanes, Masbate, and Palawan.

Asked by the committee’s vice chairman Teofisto Guingona III what the ultimate effect of a P62-billion payout would be, Sta. Rita replied, “Magsasara po ang National Power Corporation (The National Power Corporation will close down).”

Senator Guingona stressed that the central government would not allow Napocor and Psalm to default on their obligation should the SC order them to pay the back wages.

“The national government will have to step in and will have to foot the bill for the expenses. The sad part is … Yung consumer, ang mamamayan ang magbabayad nito through an increase in their electricity bill (The sad part is consumers will pay for this through an increase in their electricity bill)," he said.

Should the national government decide to step in, Congress first has to authorize the release of the amount.

“It will increase our already high power cost, which makes the country less competitive in attracting manufacturing companies to relocate to the Philippines,” Finance Secretary Cesar Purisima said.

Power rates in the Philippines are already among the highest in Asia, he noted.

Officials also questioned the amount that the SC said was due the retrenched Napocor employees who belong to the NPC Drivers and Mechanics Association, especially since many of them already received separation packages of P1 million each and were even rehired.

Atty. Maximo Paulino Sison III, head executive assistant at the Office of the Solicitor-General (OSG), said the clerk of a regional trial court in Quezon City came up with the P62 billion figure even if the case did not undergo a trial.

The OSG has already made submissions to the SC challenging the 2006 decision.

The SC specified the amount in its 2006 ruling, which voided the resolution of the Napocor board terminating its employees as part of its restructuring under the Electric Power Industry Reform Act of 2001. The Court found the Napocor resolution null, and the dismissal of employees in 2003 illegal, because only representatives of agencies forming part of the board were present in the meeting where it was passed.

“How did we come to P62 billion when 1/3 were hired the day after and 2/3 were hired within a month? What back wages and benefits were lost within a period of one day and one month?” Budget Secretary Florencio Abad said, referring to the rehired Napocor employees.

“That’s a highly questionable sum," he added.

Senate energy committee chairman Sergio Osmeña III said the SC must take into account that many of the retrenched employees were rehired by Napocor.

Granting P62 billion in back wages would mean giving each of the employees P7.5 million in addition to the separation pay they have already received and the salaries they are getting as current workers, Osmeña pointed out.

“I think the Supreme Court will have to be made to realize the implications of their decision,” he said.