MANILA, Philippines — Lending to power project developers will be a concern for the banking industry after four commissioners of the Energy Regulatory Commission were suspended, an industry official said.
The ERC approval on power supply contracts of certain power projects are critical in approving loans to developers, BDO Capital & Investment Corp. president Eduardo Francisco said.
“If there are new deals requiring new off-take contracts but will then be postponed due to the suspension of ERC commissioners, then the loan will not be disbursed,” Franciso said.
“We can give conditional approval, but usually conditions to lend are based on the ERC approved contracts. There will be an impact on lending,” he said.
Last week, the Office of the Ombudsman ordered the one-year suspension from office without pay of ERC commissioners Alfredo Non, Gloria Yap-Taruc, Josefina Patricia Magpale-Asirit and Geronimo Sta. Ana for delaying the conduct of competitive bidding in securing power supply deals.
The Ombudsman said they were found administratively liable for conduct prejudicial to the best interest of the service, aggravated by simple misconduct and simple neglect of duty.
ERC chairperson and chief executive officer Agnes Devanadera said the suspension order on the four commissioners would paralyze the whole power industry and could lead to possible occurrence of power outages in Metro Manila and in the provinces due to the inaction on P1.59 billion worth of pending applications before the agency.
However, the development of big power projects have slowed down starting this year and would continue next year due to a perceived oversupply of capacity in the sector, Francisco said.