Beneco justifies P160 million short-term loan with DBP

By Dexter A. See 

BAGUIO CITY – The management of the Benguet Electric Cooperative (Beneco) disclosed it availed of a P160 million loan from the Development Bank of the Philippines (DBP) which was part of its P300 million omnibus clean credit line for its priority projects that was used to provide its equity to the Rural Electric Finance Corporation (REFC), a consortium of the 121 rural electric cooperatives in the country.

Beneco general manager Gerardo P. Verzosa, who was invited by the city legislative body to shed light matter during Monday’s regular session, said the cooperative’s loan with DBP was subsequently settled after two and a half months as Beneco was able to acquire a P160 million loan from the REFC to pay the same even with a slightly higher interest.

He said among the added benefits derived by the electric cooperative from being an equity shareholder of the REFC is that it will be allowed a seat in the board aside from being allowed to acquire a loan that is 4 times its equity to be used for the implementation of its high impact development projects beneficial to the rapidly increasing number of consumers.

Earlier, the DBP provided Beneco with a P300 million omnibus clean credit line to provide the needed funds for the implementation of its future development projects to help improve the reliability of its distribution system and provide quality power to the consumers.

Aside from the existing P300 million clean credit line, Beneco also availed from the DBP a P450 million loan which it is currently using to finance the construction of its 3-megawatt hydro power plant in Man-asok, Sebang, Buguias, Benguet which is expected to be completed anytime soon.

The National Association of Electricity Consumers for Reforms (NASECORE) Baguio City chapter brought to the attention of the City Council the alleged failure of Beneco to provide the group with pertinent documents on the loan for its perusal whether or not the same is grossly disadvantageous to the consumers and for the city legislators to assist the non-government organization in mandating the management to produce the demanded documents.

               However, the Beneco board decided to first invite the duty authorized NAECORE Baguio chapter officer to appear before one of the regular meetings of the board for the concerned officers to explain to the group the merits of the loan and for the authorized officers to present a resolution authorizing them to represent the group in such meeting.

Verzosa underscored the Beneco board deemed it necessary to invite duly authorized NASECORE officers to explain to them the complex energy business for them to understand the same before giving to them the requested documents but it seems that they do not want to give due course to the invitation.

He said it is important for everyone to understand the complex scenarios in the power distribution business so that they will be able to understand how the industry is being administered and managed to avoid unnecessary conclusions in such instances.