Philippine Lawmakers Warn of Chinese Influence over Power Grid

Updated at 7:58 a.m. ET on 2020-02-04

Senators in Manila expressed concerns Monday about China’s potential access to the Philippine power grid, as an executive from a Chinese-linked utility told a senate inquiry that hackers had attacked the national grid’s computers “hundreds of times” in recent weeks.

Anthony Almeda, president of the National Grid Corp. of the Philippines (NGCP), which operates the electricity system – the backbone of the nation’s fragile energy infrastructure – testified that the grid's computers had come under attack from unknown cyber entities. Since 2008, the State Grid Corp. of China has held a 40 percent stake in NGCP.

The system was attacked “a hundred times already in just the past few weeks,” Almeda told the Senate Committee on Energy as it opened an inquiry into the ownership of the national utility firm and whether the Chinese state company’s stake in NGCP could jeopardize the grid’s security.

“The NGCP has been responding as fast. We have 22 calamities every year. We’ve proven ourselves that we have worked hard in having … electricity for the grid,” Almeda testified.

“And on the cyberattacks … we don’t know if it’s from the outside,” he said.

Sen. Risa Hontiveros, who filed a resolution last year that started the investigation, warned the Chinese could switch off the grid and cause outages during elections or at other times in the former U.S. colony in Southeast Asia. The United States remains a defense and trade partner but, under President Rodrigo Duterte, the Philippines has shown signs of distancing itself from Washington and growing closer to Beijing.

“In times of conflict can China shut down our power grid?” the senator asked on Monday as the committee began its deliberations.

“They are bound by Chinese laws to gather intelligence and report to the Chinese government. Now, how secure is this set up?” Hontiveros said, pointing to the Chinese company’s part ownership of NGCP. “What happens when the Philippines and China run into conflict, who will they choose?”

Since 2009, the NGCP has not been subjected to any external audits and the utility has barred government agencies from inspecting its operations, Hontiveros said.

Official: Government working to bolster grid security

On Monday, National Security Adviser Hermogenes Esperon Jr., who also testified before the committee, urged lawmakers not to be panicked or rush to change things where the national grid was concerned.

“I’d caution immediately against being in a panic about it because there are also measures that we can adopt to allow NGCP … to continue operations,” Esperon told the senate inquiry.

“Hence, we are working with stakeholders to reinforce the security protocols and guarantee that the country’s energy sector remains free from vulnerabilities and foreign control,” he said.

Esperon, a former chief of staff of the Philippine armed forces, said he had formed a cyber security team to tackle the problem and ensure that the country’s power grid was “safe from any foreign manipulators.”

“We assure Filipinos that the administration is taking steps and precautionary measures to guarantee that the NGCP, its facilities and infrastructure are protected with the highest security procedures,” he said.

Sen. Richard Gordon, who co-led the inquiry, also questioned why Chinese nationals were in executive and managerial positions in NGCP where they could exert influence over the grid’s operations.

Almeda could not provide a satisfactory answer when Gordon questioned him about how it was possible that two Chinese nationals had signed a contract for an expansion project for the grid in 2011.

Gordon suggested that the NGCP operations could be controlled remotely from China by Chinese engineers.

“They can turn off our grid from China, is this correct?” Gordon asked. “I would be uncomfortable allowing a foreigner to have a connection here.”

“The principal objective is to protect the country on a situation where we will be totally dependent or we do not have control,” the senator added.

The Chinese Embassy in Manila could not be immediately reached for comment.

CLARIFICATION: An earlier version quoted Anthony Almeda, president of the National Grid Corp. of the Philippines (NGCP), as saying that hackers had breached the grid's computers.