Only four senatorial candidates accounted for 60% of the total amount, raising concerns among electoral reform advocates about the advantage wealthy and well-connected candidates have in winning elections in the country.

Las Piñas Rep. Camille Villar, daughter of the country’s richest man according to Forbes, outspent all her rivals. She aired ads worth P2.1 billion before discounts.

Villar was followed by President Marcos Jr.’s sister reelectionist Sen. Imee Marcos with P1.9 billion worth of ads, Makati Mayor Abigail Binay with P1.29 billion, and another reelectionist senator, Francis Tolentino, P1 billion.

“The important question to ask candidates is why they are spending such huge amounts of money,” said former Commission on Elections (Comelec) Commissioner Luie Tito Guia.

Guia’s concern was echoed by Angel “Lito” Averia Jr., national chair of the National Citizens’ Movement for Free Elections (Namfrel). “What is the ROI (return of investment)? How will they recoup the cost? We don’t know. We know there’s a big controversy over the 2025 national budget,” Averia told the Philippine Center for Investigative Journalism (PCIJ). 

Experts have always described the senatorial race as “personality-based” or “celebrity-based” elections. In the “game of name recall,” Filipinos vote for the names they can remember when they troop to voting precincts on election day, they said.

Villar, Marcos and Binay ranked in the bottom half of the “Magic 12” in pre-election senatorial surveys. They are members of the country’s most enduring political dynasties but they are now fighting to keep their place in the winning circle against media celebrities leading the polls despite little to zero spending on ads so far. 

Former broadcaster and ACT-CIS party-list Rep. Erwin Tulfo and former Senate president and TV show host Vicente “Tito” Sotto III topped the latest Social Weather Stations and Pulse Asia surveys. 

All this ad spending occurred before the kick-off of the campaign period for national candidates last Tuesday, Feb. 11. 

Guia said it underscores the rising cost of elections in the country, which has limited opportunities for qualified candidates without access to resources. 

“They are spending before the campaign period even begins. What is the total amount that candidates spend to get elected to office? We need to know that,” Guia said. 

Three other senatorial candidates recorded airing ads worth at least P500 million each. Former interior secretary Benhur Abalos and reelectionist Senators Ramon “Bong” Revilla Jr. and Ronald “Bato” Dela Rosa accounted for another 17% of the amount. 

The remaining 23% was distributed among nearly 200 candidates in Senate, party list and local elections. 

“We saw the proliferation of tarpaulins after the filing of COCs (certificates of candidacy). It’s tarp pollution. We just came from the BARMM (Bangsamoro Autonomous Region in Muslim Mindanao). We saw the tarps of Sen. Imee Marcos on our way from Cotabato to Marawi,” said Averia. 

The amounts were based on the total ad spots multiplied by the published cost of the individual spots, which varied depending on the timeslot. 

Discounts were likely given to the candidates’ teams but the PCIJ does not have access to the contracts. Candidates are also not obligated to disclose spending before the campaign period.  

“It’s not the exact amount but it is indicative of the level of expenses. … Qualitatively, it shows the influence of money in politics,” said Guia. 

Averia said candidates should observe “ethical” campaigning. Heavy ad spending is “not illegal, but is it moral?” he said.

Daily average of 171 TV ads

TV accounted for most of the ad spending—P9.3 billion before discounts. AllTV, GMA Channel 7, Kapamilya Channel and A2Z aired more than half of the total TV spots.

The ad spending of candidates on TV accelerated after the filing of COCs in October last year. The last three months of the year accounted for over P6 billion before discounts or 60% of total spending in the entire year. 

In December alone, when Filipinos were expected to stay at home for the holiday break, a daily average of 171 television ads aired, based on PCIJ’s analysis of the data. A total of 5,327 TV ads aired that month, amounting to over P3.37 billion before discounts.

Radio accounted for almost P1 billion of the total amount before discounts. Villar and Marcos topped spending on the platform, followed by Ilocos Sur politician Luis “Chavit” Singson, who has since withdrawn from the race. 

Outdoor ads accounted for P200 million of spending and print ads, P40 million. The top spender in billboard ads, Agri Party List Rep. Wilbert Lee, has also withdrawn from the race. 

Data from Nielsen Ad intel does not include spending on social media, which analysts said has also been significant already. It also does not take into account the cost of producing these ads or other costs of preparations, including maintaining headquarters, allowances, and transportation of staff.

Survey topnotcher Tulfo airs ads, too 

Almost all senatorial race survey leaders have aired ads after the filing of COCs, including topnotcher Erwin Tulfo, who seeks to join his brother, Sen. Raffy Tulfo, in the upper legislative chamber.  

Erwin Tulfo was a popular broadcaster and social media celebrity before he was elected representative of ACT-CIS party-list group in the House of Representatives. 

He aired ads worth P291 million in December to promote his party-list group, Anti-Crime and Terrorism Community Involvement and Support Partylist or ACT-CIS. The group that secured three seats in the previous elections fielded Sen. Raffy’s wife Jocelyn as its second nominee.

A third possible Tulfo in the Senate, Ben Tulfo, aired TV ads worth P4.5 million in December. If he wins in May, there will be three Tulfos in the Senate.  

Dela Rosa ramped up advertising in November and December, too. He aired ads worth P500 million in the two months.  

His spending surpassed early ad spender reelectionist Sen. Christopher Lawrence “Bong” Go, his fellow reelectionist allied with former President Rodrigo Duterte, a former ally turned adversary of the Marcos administration. 

Dela Rosa and Go are two of four candidates in the “Magic 12” winning circle who do not belong to the Marcos’ senatorial ticket. The other two are broadcaster Ben Tulfo and TV host Willie Revillame. 

The winners in the Senate race in May are likely to sit as judges when the legislative chamber convenes as an impeachment court against impeached Vice President Sara Duterte, the former president’s daughter.  

Senate President Francis Escudeo said the trial may start after the President’s State of the Nation Address in July.  

Revillame is one of two leading senatorial candidates who have not recorded spending on TV, radio, billboard, and print ads as of December 2024.  

The other one is returning senator Panfilo “Ping” Lacson although the former national police chief has appeared in a TV ad of the administration ticket that aired in January, which is not covered by the latest data released by Nilsen.

Sotto only recorded spending P88,788 for print ads in January and May 2024. 

Party-list groups, too 

ACT-CIS outspent all its rivals in the party list race. The group’s ads with Erwin Tulfo were worth more than P291 million before discounts. It was followed by Bangon Bagong Minero (BBM) with almost P100 million.  

Three other groups aired ads worth P40 million to P50 million. These are 1-Pacman Party List, Ahon Mahirap Party List, and Vendors Party List.  

Tupad’ ads were worth almost P30 million; Talino at Galing Pinoy, almost P20 million; and Nanay and Apat Dapat, at least P10 million. 

ACT CIS is one of two party list groups led by the Tulfos, among the country’s newest political dynasties. Turismo Isulong Mo Party List group, whose ads were worth P2.6 million, is led by former tourism secretary Wanda Teo, the sister of Raffy and Erwin Tulfo. Wanda’s son Robert Wren Tulfo-Teo is running as a nominee. 

Quezon City Rep. Ralph Tulfo Jr., son of Senator Raffy and Representative Jocelyn, will also seek reelection. If they all win, there will be three Tulfos in the Senate and four Tulfos in the House.

Finally, ad limits 

It’s “ironic” and “laughable” that the excessive spending of senatorial and party-list nominees will now have to stop as the Philippines entered on Feb. 11, the official campaign period for the two positions, Guia told the PCIJ.  

“Saan ka ba naman nakakita ng legal framework ng elections na pinapayagan niyang mag-campaign ng walang limitation ang mga kandito outside of the campaign period. Ngayon, covered na sila ng rules, at therefore, limited na ang kanilang pangangampanya during the campaign period. Ibang klase,” he said.  

(Where else have you seen an election legal framework that allows candidates to campaign without limitations outside the official campaign period? Now, they are covered by the rules, and therefore, their campaigning is limited during the campaign period. Unbelievable.) 

The Omnibus Election Code allows senatorial and party list groups to spend P3 per registered voter. With over 68 million voters, this amounts to P205 million. Independent candidates or those without parties may spend P5 per voter. Political parties may spend P5 per voter or P343 million.  

Candidates are also limited to 120 minutes of ads per TV station. This 120-minute limit was previously imposed on all TV stations.  

On social media, the Comelec said it will require candidates to report online endorsements by celebrities. 

After the elections, candidates will file a statement of contributions and expenditures or SOCE covering donations and expenses during the campaign period. All previous spending will not be reported, however. 

Guia and Averia called for practical and appropriate laws. “One thing we should push for election reform is to define who becomes a candidate. Para hindi inaabuso. The person aspiring for an elective post should be a candidate on the day he filed his COC,” Averia said.  

Guia said spending limits have been in place because of the inherent inequality in political opportunities in the Philippines. “But if limits cannot be imposed, it should be mandatory for all aspirants to declare their spending,” he said.

Read more: Candidates aired P4B worth of TV, radio ads before filing

The post Even before campaign period, TV, radio ads of candidates exceeded P10B before discounts appeared first on CoverStory.

As early as January last year, Sen. Imee Marcos already aired 271 TV and radio ad spots worth P21 million based on published rate cards or before discounts.

Every month after, President Marcos Jr.’s sister appeared on Filipino voters’ TV screens and spoke in radios across the country. She gradually increased the number of her advertisements until she reached 1,145 ad spots worth P303 million in September alone.

Her political ads from January to September 2024 amounted to P1 billion based on rate cards, according to data obtained by the Philippine Center for Investigative Journalism (PCIJ) from Nielsen Ad Intel.

The amount is staggering, Jean Encinas Franco, an associate professor at the University of the Philippines’ Department of Political Science, told PCIJ. 

“It gives me a sense they are already using their own money,” she said. “Candidates cannot use their own money. When you have a stake in election spending, all the more you will be corrupt.”

Campaigns have traditionally relied on donors, usually businesses, to fund election activities. Increasingly, however, the country has seen candidates using personal funds or relying on family members for support.

“It’s because the candidates are businessmen themselves,” said former Commission on Elections commissioner Luie Guia.

Marcos was first elected to the Senate in 2019, and is now seeking a second term. She is the third in the family to occupy a seat in the chamber, following her father, the late dictator Ferdinand Marcos, and her brother President Ferdinand Marcos Jr. 

The Marcos clan continues to dominate politics in their home province of Ilocos Norte. 

Breaching P1B 

Marcos is one of two senatorial candidates who aired ads worth P1 billion over the nine-month period before the filing of certificates of candidacy (CoCs) in October 2024. 

The other is Las Piñas Rep. Camille Villar, the youngest and only daughter of billionaire real estate mogul Manuel Villar Jr., the country’s richest man, according to Forbes Magazine. He is a former senator and had served as Senate president. 

Unlike Marcos, Villar did not start advertising in January. She had ads worth P100,000 in March but that was it, until August or two months before the CoC filing.

All of a sudden, she flooded TV and radio stations across the country with her ads. She had ads worth P598 million in August and P477 million in September. 

The ads of Marcos and Villar accounted for about 50% of the total P4.1 billion worth of  political advertisements ahead of the CoC filing.  These amounts do not include the cost of producing the advertisements, their separate social media campaigns, the maintenance of campaign offices, and salaries of staff, among other regular expenses.

As of December 2024, Villar was already the top spender on Facebook, the most popular social media platform in the country. She recorded paying Meta P13 million to boost her posts.

Villar is the fourth in her family to seek a seat in the Senate, following her father, her mother Cynthia and her brother Mark, all of whom also recorded heavy ad spending during their campaigns.

Both Cynthia and Mark reported spending personal funds to run their campaigns.

In 2013, the year Cynthia succeeded her husband in the Senate, she reported spending P133.9 million. Out of this amount, P131.6 million was drawn from her personal funds and only P2.6 million from other donors.

Markm who joined her mother in the Senate in 2022, declared spending P131.8 million during his campaign based on his statement of contributions and expenditures (SOCE). He received zero contributions and paid the entire amount out of his personal funds.

Awareness, conversion and survey cliffhangers

There could be several motivations behind candidates’ heavy ad spending, according to experts interviewed by PCIJ. 

Marcos may not be satisfied with her survey position in the second half of the winning circle, said Arjan Aguirre, assistant professor at Ateneo de Manila University. 

“The closer you are in the 12th place, the smaller the margin there is that separates you from the 13th placer. No one wants to be in that place in a Philippine senatorial election,” Aguirre said.

He said her ads are intended to increase her “awareness” among voters so that she can later convert them to support her.

“For Villar, it is safe to say here that they just want her to win by raising her awareness level and later close the gap between that and the voting preference level,” he said.

Awareness and conversion are jargons in product advertising, which recognized the importance of brand recall when consumers are making decisions about products they buy. In election campaigns, candidates become the products and name recall is the goal. 

Competing against media celebs

In a race packed by media celebrities who have the advantage of name recall, Marcos and Villar are not the only scions of political clans who ramped up ad spending ahead of October’s CoC filing. 

Makati Mayor Abigail Binay, reelectionist Sen. Francis Tolentino and former interior secretary Benhur Abalos aired ads worth P300 million to P500 million.

These clan members are competing against former news broadcasters Erwin and his brother Ben Tulfo; TV hosts and comedians Vicente “Tito” Sotto II, a former Senate president, and Willie Revillame; boxing champion Emmanuel “Manny” Pacquiao; and actors Bong Revilla and Lito Lapid. 

In comparison, these media celebrities record little to zero ad spending during the nine-month period. 

A similar pattern can be seen in the candidates’ spending on Facebook, the country’s most popular social media platform. 

Imee’s higher ambition?

There’s another possible motivation that Senator Marcos might have, said Aguirre. 

“Imee might be preparing for 2028. Midterms are usually for those people who are eyeing for higher positions like president or vice president, since they use the Senate election to allow them to gauge their ability to generate votes at the national level,” he said. 

Pre-election surveys conducted after the CoC filing, however, show that the two top ad spenders in the May 2025 senatorial elections remain in vulnerable survey positions, hanging by a thread in the “Magic 12” winning circle. 

They ranked 12th to 14th in the December 2024 Social Weather Stations surveys, with 21% voter preference. 

Marcos and Villar were also statistically tied in the November 2024 Pulse Asia survey, ranking 10th to 15th, with 37.5% and 36.5% voter preference, respectively. 

In the next four months before the May 12 midterm elections, Guia said other candidates are expected to attempt to match the heavy ad spending of their rivals, setting the stage for another expensive election.

Guia said voters should ask: “Why are the candidates spending huge sums to win elections? The burden of explaining should be on the candidate.The public should demand it.”

Read more: Candidates aired P4B worth of TV, radio ads before filing

The post Are candidates funding their own campaigns? appeared first on CoverStory.

Ads worth more than P4 billion have already aired on TV and radio stations across the Philippines even before candidates filed their certificates of candidacy (CoCs) last October.

Close to a hundred candidates for senator, party-list and district representatives, other local positions, as well as political parties,  had TV spots worth P3.7 billion and radio spots worth P342 million from January to September last year, based on published rate cards. 

The data was obtained by the Philippine Center for Investigative Journalism (PCIJ) from Nielsen Ad Intel, which monitors candidates’ spending. The amounts are based on published rate cards or before discounts may have been given to the candidates’ teams.

A Nielsen report shows that TV remains to be an important medium to reach voters. Digital platforms widen the reach, it said. 

The candidates also had billboards all over the country worth P70 million and ads on print media worth P18 million.

Two senatorial candidates, scions of the country’s biggest and most influential political clans, account for half of the total advertisements. 

Las Piñas Rep. Camille Villar and Sen. Imee Marcos each had ads worth P1 billion before the CoC filing, based on published rate cards. It is not known if they received—and how much—discounts from media organizations that provided space for their advertisements. 

“The amounts are staggering. It tells you that [campaign spending] will go up as we move forward in the 2025 elections,” Jean Encinas Franco, associate professor at the University of the Philippines’ Department of Political Science, told PCIJ. 

The amounts do not include candidates’ spending on social media, which Franco believed is already significant, and the cost of producing the advertisements, the maintenance of campaign offices, and salaries of campaign staff, among other regular expenses.

It shows how candidates have ignored legal timelines, said former Commission on Elections (Comelec) commissioner Luie Guia. “Candidates have recognized that they have to really project themselves earlier on as serious contenders. Unfortunately, that means spending so much money to have a more effective reach,”  he told PCIJ. 

Guia said the other candidates are expected to attempt to match the heavy ad spending of their rivals, setting the stage for another expensive election. 

Attempts to “even the playing field” during elections have been undermined, he said. “Well-resourced candidates still would have much leeway despite what the law says.” 

Stronger laws regulating premature campaigning and campaign donations are needed, said Arjan Aguirre, assistant professor at the Ateneo de Manila University.

It’s not only advertising that needs better regulation. 

“We can see so much campaign activities or political operations going on a year before an electoral cycle,” Aguirre said, citing heavy government spending in localities for “ayuda,” which electoral reform groups said has been abused by incumbent politicians to curry favor with voters.  

He said amendments to the country’s Omnibus Election Code are needed to give the Comelec the powers and resources to monitor the flow of funding to parties.

TV get 90% of budget for traditional media

Television received the lion’s share or about 90% of the candidates’ advertising budget for traditional media, based on Nielsen Ad Intel’s monitoring. 

Radio, billboards, and print media received the remaining 10% of the budget. 

“Television remains to reach around 8 out of 10 Filipinos, with duration spent watching television not lower than one hour per day. Compared to other countries, the Philippines has one of the highest reach in terms of platform,” Nielsen reported. 

Villar and Marcos recorded the biggest spending on TV and radio.

Agri party-list Rep. Wilbert Lee, also a senatorial candidate, recorded the biggest spending on outdoor media.

Lee, among the biggest spenders on social media, did not air ads on TV and radio during the nine-month period. He had print ads worth less than P250,000. 

Las Piñas congressional candidate Sen. Cynthia Villar (P2.6 million) and Speaker Ferdinand Martin Romualdez (P1.3 million) recorded the biggest spending in print ads, followed by EduAksyon party-list group (P1.2 million). 

Personality politics 

The rising cost of running for elections in the Philippines underscores the weakness of political parties, according to experts interviewed by PCIJ.

“Political parties are becoming less capable of doing their work during campaigns since they are now being replaced by personalities from ad hoc campaign teams composed of market practitioners and PR firms,” said Aguirre.

The substance of campaigns has suffered as a result, he said. Instead of discussing issues, candidates have focused on what is appealing and sellable to people.

“Political parties and PR firms should complement each other,” said Aguirre, proposing that the latter works to enhance the work of the former. 

He said the national discussion should be about “how we should understand a problem that plagues that society, what policy we expect to emerge in the next Congress, and priority initiatives to address a problem.”

If political parties managed campaigns, Franco said stricter standards and rules would also be implemented, including adherence to reform policies.

She said political parties can exact accountability among candidates and facilitate more transparency in political financing, reducing risks of donors’ influence on winning candidates.

Even in the party-list elections, designed by law to fill the House of Representatives with issue-based members, personalities dominate.

A PCIJ report showed that political dynasties have swarmed the party-list elections in the last decade. In this election cycle, several senators have immediate relatives running for party-list seats.

Others have advertised using popular celebrities such as Piolo Pascual and Joshua Garcia. 

Vendors’ group is top ad spender in party-list race

The Vendors party-list group is the top ad spender among party-list groups from January to September 2024. The group aired TV ads worth P12.25 million, a big chunk of its P14.8 million advertising budget for the period. ‘

The group has enjoyed a wide media coverage through Deo Balbuena, who is popular online as “Diwata.” Balbuena is the group’s fourth nominee. (Party-list groups may only have a maximum of three seats.)

More party-list groups advertised on outdoor media. Ten had billboards worth P1 million to a little over P13 million across the country over the nine-month period. 

Talino at Galing Pinoy, the second biggest ad spender in the race so far, poured its budget on billboards. Its exposure was worth over P13 million nationwide, or almost the entirety of its P14 million total budget for traditional media. 

Its top nominee, incumbent Rep. Jose Teves, is the father of Mayor Paolo Teves of Baras town in Catanduanes.  

Party-list groups collect votes nationwide, like the senators. In the previous 2022 elections, the ACT-CIS party-list group of former broadcaster Erwin Tulfo topped the race with over 2 million votes. It was given two seats.

The last party-list seat was given to Akbayan. It received 236,226 votes.

Camarines Sur, Pangasinan races

Franco is also concerned that the candidates are already using their own money to fund their campaigns. 

“It gives me a sense they are already using their own money. Candidates cannot use their own money. When you have a stake in elections pending, all the more, you will be corrupt,” she said. 

Some local races are also increasingly becoming more expensive. 

Camarines Sur gubernatorial candidate LRay Villafuerte was the biggest spender among local candidates before the CoC filing in October based on the data from Nielsen Ad Intel. He aired TV ads worth P355.7 million, higher than the budget of many senatorial candidates. 

Other local candidates spent their advertising budget on radio spots and print ads, which are cheaper than TV spots. 

Pangasinan politicians are among the biggest spenders on radio. 

Bad laws

Comelec has attempted but failed to ban premature campaigning and limit campaign spending.  It previously lost Supreme Court cases that would have banned campaigning before the official campaign period and would have set a limit on TV and radio advertising minutes allowed per candidate.

The Supreme Court ruling in Penera vs Comelec has placed a heavy constraint on the Comelec. The high court upheld that a person becomes a candidate only upon the start of the campaign period—which in this election season starts on Feb. 12 for national candidates and March 28 for local candidates. 

“A candidate is liable for election offenses only upon the start of the campaign period,” the ruling said. 

It means all expenditures before the campaign period would not be counted against the allowable spending of candidates.

“The problem is the law itself. The Supreme Court decision is a correct interpretation of a bad law,” said Guia. 

Laws need to be amended, including the Omnibus Election Code, said Guia and Aguirre. But Congress has sat down on proposed amendments to the 1985 law, which is two years older than the Philippine Constitution.

Politicians have not shown an appetite to change the status quo that benefits them, said Guia. “It works perfectly well for those who benefit under the current system. Why would they change it?”

Read more: Political dynasties also swarm the party-list elections

The post Candidates aired P4B worth of TV, radio ads before filing appeared first on CoverStory.

In its preliminary review, the Energy Regulatory Commission (ERC) disallowed the expenses of National Grid Corporation of the Philippines (NGCP) amounting to P3.7 billion, which it said were “improperly documented or not recoverable for customers.”

The biggest items disallowed were for public relations, corporate social responsibility (CSR), and advertising expenses. 

NGCP’s advertising expenses, for example, reached P130 billion from 2016 to 2020. It argued that these expenses were “not for marketing purposes” but for “information dissemination.” 

The ERC, however, demanded proof of the need to spend such an amount on ads. 

“There is a test of reasonableness [in assessing these expense items]. If these were spent on full-page ads saying ‘Bawal humawak ng livewire,’ [we must ask]: reasonable ba ‘yung full-page ad saying that?” ERC Chair Monalisa Dimalanta said in a news conference last November, in which she announced the results of the commission’s preliminary review. 

In a news conference held right after the ERC’s own, NGCP Assistant Vice President Cynthia Alabanza said it was “unfair” for the regulator to “retroactively” apply new rules.

“Before you join a game, you need to know the rules. And to retroactively apply rules while you’re in a game, that’s unfair,” Alabanza said in Filipino. “I’m wondering why they released [the result] when it is still raw. It’s like if we had 100 steps to take to the finish line, we’re still in step two.” 

To let the public know

Dimalanta said in the ERC news conference that it was necessary to release the initial findings. “I think we owe it to the public to let them know what is happening [in the review] and to provide guidance on what is allowed and disallowed [in the expenses of NGCP].” 

Alfredo Non, who served as ERC commissioner from 2012 to 2018, said there should have been “clearer guidelines” on what spending items were “acceptable.” 

“As far as I am concerned, the ERC has not released guidelines on how regulated entities may spend on CSR, or salaries,” he said. 

But Non acknowledged that during his time, the ERC disallowed salary increases for a government-controlled corporation. 

“When the Philippine Electricity Market Corp. asked [earlier] for higher market fees, because that’s how they cover their budget for salary increases, we disallowed it. Because they refused to show documents of their payroll,” he said, adding: 

“So if NGCP shows documents, then they should be allowed.” 

NGCP’s reply to the ERC findings is expected to have addressed these issues.

According to the ERC, the disallowances were intended to protect consumers.

“It’s not that the commission is prohibiting [regulated entities], for example, from increasing the salaries of their employees, or giving donations, or engaging in CSR [activities],” Dimalanta said in the ERC’s November news conference. 

“What we’re saying is, you can’t recover that from the rates [you impose on consumers]. You recover that from your profits,” she said. 

The ERC had previously ruled, in cases involving power distribution utilities, that CSR expenses should not be charged to consumers.

In its 78-page order, it also highlighted that the NGCP, as a public utility, is mandated to incur only “necessary and efficient costs,” with expenses kept “at a minimum.”

To send a clear message

Adoracion Navarro, senior research fellow at the state think-tank Philippine Institute for Development Studies (PIDS) said the ERC’s moves are intended to send a clear message to NGCP and other regulated entities to practice discipline.

“If before, [the NGCP] got away with [disallowed expenses], then the regulator is now setting more discipline,” Navarro, a former deputy director general at the National Economic and Development Authority, told the PCIJ.

“The regulator is now just enforcing that we have to stick with the principles or the rules,” she said. 

A former energy official who asked not to be named said the ERC is making sure that NGCP is “not shortchanging the industry and the Filipino people.” 

The official said that the entire rate-setting process is supposed to determine which expenses are considered prudent, and that it’s up to NGCP to justify its revenue requirements.

The ERC is “wary,” the official said. “It just wants to make sure that NGCP is functioning at its optimum efficiency, and that it is not shortchanging the industry and the Filipino people.” 

“The concession agreement is a privilege, and that comes with attendant responsibilities,” the official added. 

Will there be refunds?

The ERC is expected to release its final determination of the rates in the first quarter of 2024.

Will there be cash refunds? According to the ERC, refunds are possible but not guaranteed.

“What we’re seeing are just telltale signs. Because they are claiming this much, and we are deciding that they can only recover this much, then there could be a downward adjustment [on their allowable revenue], or a refund,” Dimalanta said in November.

Instead of cash refunds, the ERC is inclined to implement a “reduction of transmission rates,” Sen. Sherwin Gatchalian said at a Senate hearing held on Nov. 13, 2023, to discuss the commission’s budget. He defended the ERC budget during last year’s budget deliberations. 

“In terms of modality, it’s easier to reduce the rates, and easier for the regulator to monitor and apply, and to supervise [that kind of] implementation,” Gatchalian said during the hearing. 

How much that reduction would be reflected in consumers’ electricity bills has yet to be determined, he said, but added that it would be “significant.” 

Non said it was the release of the partial results that “created a wrong impression that there would be refunds.”

The release of ERC’s final review of NGCP’s fourth regulatory period was initially expected as early as August 2023. Instead, a preliminary review was released three months later, in November, around the time that Congress was deliberating on the national budget. 

“It’s budget season. [The ERC] had to show to Congress that they were doing their jobs,” said the former energy official who spoke with the PCIJ. 

The Senate approved an P888-million budget for the ERC, higher than the P611 million originally proposed by the Department of Budget and Management.

Under scrutiny and criticism

NGCP faced scrutiny amid heavy criticism of its performance as the country’s grid operator.

Its NGCP officials have been called to many hearings held at the House of Representatives and the Senate since parts of Luzon were subject to rotational power outages in the summer of 2021. It does not help that the Luzon grid also suffers from yellow and red alerts every year once the hot season sets in.  

NGCP is responsible for building more transmission lines, but many of its projects are delayed. Power producers have previously lamented delays in their connections to the grid. 

President Ferdinand Marcos Jr. himself reprimanded NGCP during his second State of the Nation Address in July 2023 over these delays.

“We are conducting a performance review of our private concessionaire, NGCP. We look to NGCP to complete all of its deliverables, starting with the vital Mindanao-Visayas and the Cebu-Negros-Panay interconnections,” Marcos said in his speech.

Last month, Marcos again took a swipe at NGCP for failing to prevent a total power blackout on Panay Island that lasted three days.

“This incident emphasized the vital role of these interconnection projects. We cannot afford to have another round of this costly interruption, not only in Panay Island but anywhere in the country,” he said in an NGCP event announcing the completion of the Mindanao-Visayas interconnection.

Marcos pushed for the completion of remaining critical interconnection lines, including the Cebu-Negros-Panay backbone project during the event.

“We look forward to your assurances in the promised completion of the 230 kV Cebu-Negros-Panay backbone project by March of this year,” he said. 

The ownership structure of NGCP has also been a subject of security concern because it is 40% owned by China’s State Grid Corporation. Lawmakers have expressed fears that Beijing could use NGCP for sabotage in case of heightened conflict over the West Philippine Sea.

NGCP said this is not a concern because “only Filipinos are manning [NGCP] substations.” The remaining 60% stake is split between businessmen Henry Sy Jr. and Robert Coyiuto Jr.

Financial muscle

On the other hand, there are concerns that cutting NGCP’s profits could affect its ability to expand transmission lines. 

NGCP needs the financial muscle to develop the country’s transmission grid and prevent massive blackouts. It also needs to modernize the grid to support renewable energy suppliers, according to experts.

In a 2023 report, the think tank Climate Analytics estimated that the Philippines would need transmission lines to accommodate 163 gigawatts (GW) of energy, taking into account the variable nature of proposed and committed renewable energy projects.

NGCP’s Alabanza also said as much. She said transmission planning would be critical to the green energy push.

“So if [the ERC] limits our ability to recover our bonafide expenses, then it would have an impact,” she said.

Non warned of consequences if the ERC’s preliminary review is upheld. He said NGCP’s investors could be “forced to pull out” if the effects of the review put a dent in the company’s financial ability to operate. 

“If I were NGCP, I would fight it out [in court], because the basis for you to continue is a going concern. And if the effect of the review is too significant, then I may pull out [of the concession agreement,” he said.

Whatever the outcome, the ERC’s final review of NGCP’s rates will inevitably have consequences on the energy industry. It will also translate to real costs that Filipino consumers will bear.

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