Lanao del Sur power cooperative restructures P3.7-billion debt

MANILA, Philippines - The National Power Corp. (Napocor), the National Grid Corp. of the Philippines (NGCP) and the National Electrification Administration (NEA) are expected to enter into a restructuring agreement with Lanao del Sur Electric Cooperative (Lasureco) to cover P3.7-billion worth of debt.

The debt restructuring marks the second year of the electric cooperative’s rehabilitation program. Lasureco was considered as Napocor’s most delinquent customer with outstanding debts placed at P2.28 billion as of June 2007.

Napocor noted that Lasureco also failed to complete an electrification project funded by NEA, has not been paying its various suppliers and even its own employees.

Due to this delinquency, Napocor and NEA intervened in Lasureco’s operations in November 2007. This paved the way for the signing of a memorandum of agreement (MOA) with Lasureco to rehabilitate the cooperative by improving its operations and putting its financial house in order.

With Napocor and NEA at the helm, Lasureco has been transformed into a well-managed cooperative. It is now able to pay its current bills to Napocor and to the NGCP through a sustainable payment scheme.

For the very first time, the cooperative has also started paying its P107-million debt to NEA by remitting P1 million every month.

Napocor said Lasureco has completed the NEA-funded electrification project and has energized 83 barangays in Lanao del Sur.

Lasureco is now able to pay the salaries of its employees on time and has even started paying their back wages. It has also become more regular in its employee-related remittances to the Social Security System, the Bureau of Internal Revenue and Philhealth.

In a report, Ashary P. Maongco, project supervisor and acting general manager of Lasureco, said the cooperative is now able to provide stable and reliable electricity supply to the entire province of Lanao del Sur.

“Lasureco’s service has greatly improved and its power systems have stabilized – gone are the days when power supply was erratic and unreliable,” Maongco said.

Lasureco’s system losses has been contained from an alarming 63 percent to a more manageable 29.94 percent.

“Admittedly we still have a long way to go before we attain the 14-percent system loss prescribed by the Energy Regulatory Commission, but at least we have made a very good start.”

In terms of collecting its receivables, Lasureco’s collection efficiency has likewise improved four-fold from a dismal eight percent to a more acceptable 33 percent.