The National Power Corp. (NPC) had P3.070 billion in power receivables that remained uncollected for more than 10 years as of end-2025, depriving the state-run agency of funds that could have supported its operations, state auditors said.

The disclosure came in the 2025 annual audit report of the Commission on Audit (CoA), which said the long-outstanding receivables raised concerns over NPC's collection efficiency and its management of government funds.

“The long outstanding receivables of more than 10 years totaling P3.070 billion remained uncollected as at December 31, 2025,” CoA said.

According to the auditors, the failure to collect these receivables limited the funds available to NPC for its operations, particularly its mandate to provide electricity to areas not connected to the main power grids. Power receivables are amounts already billed for electricity delivered but left unpaid, meaning the flagged sum represents revenue that has sat on NPC's books for more than a decade without being converted into cash.

CoA also raised concerns over the financial sustainability of NPC's missionary electrification operations, citing insufficient subsidies, rising petroleum prices, uncollected power bills, and delays in the collection of Universal Charge funds.

The Universal Charge for Missionary Electrification (UC-ME), which is remitted to NPC by the Power Sector Assets and Liabilities Management Corp. (PSALM), serves as a subsidy for the agency's missionary electrification functions, including the supply of electricity to off-grid areas. Universal charges are levied on electricity end-users under the Electric Power Industry Reform Act of 2001, so the subsidy stream NPC relies on depends on collections passed through PSALM.

“The UC-ME remitted to NPC by PSALM… was insufficient in view of the increasing prices of petroleum products used in the operation of power generators, non-collection of long overdue power receivables, and untimely collection of UC Funds, which compromise the continued delivery of power supply to off-grid areas,” CoA said.

These financial pressures contributed to NPC recording a net deficit of P3.282 billion in 2025, more than double the P1.529-billion deficit logged in 2024. The agency's financial position was further strained by reduced net financial subsidies and higher operating costs, affecting its capacity to sustain operations.

The audit also flagged 19 garnished depository accounts amounting to P300.822 million that remained unresolved due to missing documentation. Garnished accounts are deposits placed under legal hold pending resolution of claims against them, which means those balances cannot be treated as freely available funds. In addition, the report identified P983.750 million in unsettled audit disallowances — expenditures that auditors had found irregular or otherwise subject to disallowance.

CoA rendered a qualified opinion on NPC's 2025 financial statements after identifying P737.638 million in unreconciled accounting discrepancies involving inventory, inter-agency receivables, and trust fund accounts. A qualified opinion is issued when auditors find specific matters that prevent them from fully endorsing the financial statements — short of the unqualified, or “clean,” opinion that signals no such exceptions.

The largest variance involved P314.071 million in fuel, oil and lubricants inventory, where the records of NPC's finance office did not match its physical inventory count. State auditors said they could not verify the recorded inventory balance because of unreconciled differences and a lack of supporting documents, preventing them from determining whether adjustments to the financial statements were necessary.

Another P250.829-million discrepancy involved inter-agency receivables between NPC's records and those of PSALM, while P172.738 million remained unreconciled in Universal Charge-Environmental Charge trust accounts.

CoA directed NPC management to strengthen its reconciliation procedures, require overdue electric cooperatives to submit debt-restructuring proposals, and exhaust legal remedies to recover outstanding receivables. It also urged the agency to address unresolved audit disallowances and improve the management of its financial resources.

Those directives set out the corrective agenda to watch: submission of debt-restructuring proposals by overdue electric cooperatives, progress in recovering the decade-old receivables, and the reconciliation of the flagged accounts. How these items — along with the garnished deposits and unsettled disallowances — move through subsequent CoA audit reports will indicate whether the agency's collection and record-keeping issues are being resolved.

— Pexcel John Bacon, BusinessWorld