Napocor remits P2.6B to NG

For the first time in 10 years, the National Power Corp. (Napocor) remitted P2.6 billion in dividends to the National Government after posting an unprecedented P85.99-billion net income in 2005.

Napocor president Cyril C. Del Callar said he had formally informed the Bureau of Treasury (BTr) of the dividend remittance in a letter dated Jan. 2, 2007.

"We want to give back portion of whatever income we have in 2005 to the taxpayers," he said.

Republic Act 7656 requires government-owned and -controlled corporations to declare part of their annual net earnings as dividends to the NG. RA 7656 was signed into law in 1993 by then president Fidel V. Ramos.

The amount of the remittance was recommended by the Department of Finance to the Office of President.

After almost 10 years of being in the red, Napocor made a dramatic financial turn-around in 2005 by posting a net income of almost P86 billion, the highest-ever in its 70-year corporate existence.

Del Callar attributed the improved financial performance in 2005 to a rigorous cost-cutting program which generated savings of almost P25 billion.

Among the measures implemented by Napocor were: economic load dispatching of the corporation’s power plants; and improving the operational efficiency of power plants.

Other measures were: the availment of discounts on some of the corporation’s fuel deliveries; optimization the use of local coal which is less expensive than imported coal; cutting down on operating expenses; deferment of some capital expenditures; and reduced contractual obligations from some independent power producers.

Other factors that contributed to Napocor’s financial upturn in 2005 were: the Energy Regulatory Commission’s approval of adjustments in Napocor’s generation rate adjustment mechanism and incremental currency exchange rate adjustment, as well as the corporation’s application for a rate adjustment under its return-on-rate-base with time-of-use program; the strong showing of the peso against major foreign currencies, which significantly eased the corporation’s burden of paying its long-term, yen- and dollar-denominated debts; and the absorption by the National Government of P200 billion of Napocor’s outstanding liabilities, as provided for under the Electric Power industry Reform Act.