Beneco camps agree to settle unpaid dues worth millions

Magalong hits suppression of funds 

By Jordan G. Habbiling, Aileen P. Refuerzo and Dexter See

BAGUIO CITY -- Amid the leadership impasse in the Benguet Electric Cooperative (Beneco), the two opposing camps agreed to work together to settle unpaid dues of the electric cooperative with its power supplier which had already accumulated to P245 million as of June 2022.
    Engineer Melchor Licoben, Board of Directors (BOD)-appointed general manager, said the unsettled dues had been the result of the frozen depository accounts of Beneco in different banks.
    Mayor Benjamin Magalong had strongly denounced moves suppressing Beneco funds deposited in banks saying these were selfish acts perpetrated without regard to the welfare of member-consumers numbering 130,000.
    In a forum initiated by the Baguio City Council last Monday, both camps acceded to the city officials’ call to put aside their dispute and come up with mutually acceptable arrangements for settlement of Beneco’s unpaid dues.
The city council’s committee on public works, transportation, and traffic legislation was tasked to mediate the compromise talk between the two camps and submit a report to the city council within 30 days.
    The councilors agreed problems concerning operations of the electric cooperative must be resolved urgently to prevent stop of power services to the public. 
    According to Licoben, the electric cooperative’s bank accounts containing a total amount of P441 million had become inaccessible since banks did not release these to their camp, affecting operations of the electric cooperative including settlement of payments to its power supplier, Team Energy.
    He said the delay in payment may result in surcharges as stipulated in the contract and may jeopardize efforts of the electric cooperative to renew its contract with Team Energy. 
    Lawyer Esteban Somngi, BOD president, said educational, burial and medical assistance as part of the cooperative’s corporate social responsibilities had also been put on hold due to inaccessibility of its bank accounts.
    Employees’ benefits such as retirement pay were also being withheld as a result of freezing of the bank accounts, he added.
    In his advisory issued on Dec. 27, 2021, Licoben said Landbank of the Philippines (LBP) and Philippine National Bank (PNB) changed signatories and closed accounts.
    Development Bank of the Philippines also stopped honoring Licoben and Somngi as signatories.
    Metrobank, Rang-ay and Bank of the Philippine Islands (BPI), decided to freeze the funds.
    The seventh bank, Summit Bank, sought the court’s intervention by filing a declaratory relief.  
    The banks’ actions stemmed from the leadership dispute between Licoben and lawyer Marie Rafael who was appointed by the National Electrification Administration (NEA) as the electric cooperative’s general manager.
    The camp of Licoben and Somngi including thousands of member-consumer-owners (MCOs) of Beneco had maintained that the NEA did not have the mandate to appoint a general manager of an electric cooperative and cases and filed cases with courts questioning the overreach of NEA regarding such appointments.
    They said it was only the board of directors of ECs which had the mandate to appoint GMs as provided by law.
    In their letter to the city officials dated July 22, 2022, the Beneco management, board of directors, Beneco Supervisors’ Association and Beneco Employees Labor Union had assailed the camp of Rafael for allegedly ‘harassing’ the banks, causing these banks to either stop honoring Licoben and Somngi as authorized signatories or freeze the Beneco funds.
    The Licoben-Somngi camp and MCOs had also accused the other camp of illegally withdrawing P58 million from LBP, P2.6 million from PNB, and P8.5 million from BPI.
    However, lawyer Maria Andres-Cascolan, Rafael’s spokesperson, during Monday’s city council session, said claims of Licoben’s camp were “speculative.” 
    She denied the allegation that banks received threats and claimed the suspension of transactions with any party was an offshoot of the banks’ ‘internal policy.’
    In an official statement issued last August 7 on social media, Rafael said the banks were only “exercising their mandate to safeguard their depositors’ financial accounts” and were “trying to seek redress from the courts who shall decide to whom they shall transact with or have the funds be released to.” 
    She said the bank accounts had been made inaccessible both to her and Licoben.
    In response to the city council’s request for transparency, both camps agreed to submit to the council their audited financial reports in the past months and to furnish the body quarterly financial reports henceforth. 
    Councilor Jose Molintas advised both camps to avoid attacking each other on social media so as not to exacerbate existing problems.
    On Sept. 23, 2021, the House of Representatives adapted a resolution urging the NEA Board of Administrators to maintain status quo in the leadership of Beneco until all issues on the selection of the electric cooperative’s general manager have been resolved.
    The dispute in the Beneco leadership has been elevated to local courts and Court of Appeals.
    A Lower House committee is at present hearing the Beneco case and those of other ECs nationwide as it is affecting the power situation of the country.
    Mayor Benjamin Magalong said August 6, "Right from the start, it has been the city's position that the leadership problem should not by all means lead to disruption of services by the power cooperative since the decision on the issue now rests with the court. But as it is turning out, Beneco's services are bound to be affected by this unconscionable move to curtail its funds by the depository banks apparently due to pressure from the opposing camp."
    The Beneco management led by Licoben and board of directors affirmed that most of the depository banks had frozen the power cooperative's accounts apparently due to pressure from the group of Rafael and NEA.
    They said this has affected the cooperative's cash flow and resulted to its defaulting with the payment to its power supplier on two occasions after the banks refused to honor its transactions.
    While the banks froze Beneco accounts, they had reportedly allowed withdrawals made by the opposing camp, the officials said.
    They said the camp's moves were in total disregard of House Resolution 213 which urged NEA to maintain a status quo until the issue on the selection of the general manager has been resolved.
    Magalong had from the start called for a status quo on the management of the cooperative pending resolution of the case.
    The City Council, during last Monday’s regular session, tasked the committee on public utilities, traffic and transport legislation to mediate the feuding camps of Beneco.
    Earlier, Licoben and Somngi sought the assistance of the local government to compel the electric cooperative’s depository banks to release the frozen funds for the same to be able to pay its obligations with its power supplier among othye4rs to avoid its power supply from being cut off that will lead to total power outages in the Baguio and Benguet areas.
    Licoben disclosed that Beneco is already in default on the payment of its power bill with TEAM Energy by more than P30.6 million.
    Beneco was also in default on the payment of its power bill in May by around P67 million.
    He added that for the succeeding months, there is a big possibility that Beneco will not be able to settle its power bill amounting to more than P245 million monthly that might compel the power supplier to cut off the power supply that will lead to total power outages in the future.
    The committee will first tackle with the parties the mode of settling Beneco’s unpaid obligations with its power supplier and how to continue paying the same before tackling other related issues on its obligation with other suppliers and the implementation of CSR projects that were suspended.
    The decision of the council to mediate the said problem is to avoid the country’s top performing electric cooperative from being negatively perceived with the current leadership impasse that is now worsening in the absence of the final ruling from the Court of Appeals (CA) on the leadership issue.