NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
of E!)f c Tti<n'
23 MAR-7 P4 35
SENATE 
S. No. 1 975
RtCE’-VLD ay
INTRODUCED BY SENATOR JOSEPH VICTOR G. EJERCITO
AN ACT
EXTENDING THE CORPORATE LIFE AND STRENGTHENING THE POWERS OF 
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION 
FOR ANOTHER THIRTY (30) YEARS, AMENDING FOR THE PURPOSE 
SECTIONS 47, 49, 51, 55, 63, AND 70 OF REPUBLIC ACT NO. 9136, 
OTHERWISE KNOWN AS THE, "ELECTRIC POWER INDUSTRY REFORM ACT 
OF 2001", AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The Power Sector Assets and Liabilities Management (PSALM) Corp. was 
created to lead the privatization of generation and transmission assets of the National 
Power Corporation (NPC) and the National Transmission Corp. (TransCo). PSALM 
began its operations as a wholly-owned and-controlled government entity in July 2001 
with the following functions:
1. Structure the sale, privatization or disposition of NPC's assets and independent 
power producer (IPP) contracts and/or their energy output based on such terms 
and conditions that will optimize the value and sale prices of these assets;
2. Liquidate NPC's stranded contract costs using proceeds from sales and other 
properties, including proceeds from the Universal Charge;
3. Restructure existing loans of NPC; and
4. Collect, administer and apply the NPC portion of the Universal Charge.
PSALM has the mandate of managing the orderly sale, disposition, and 
privatization of the NPC generation assets, real estate and other disposable assets, 
and Independent Power Producer (IPP) contracts to optimally liquidate all NPC


financial obligations, inciuding stranded debts (SD) and stranded contract costs (SCC), 
which were transferred to and assumed by PSALM pursuant to R.A. No. 9136. 
Moreover, PSALM assumed aii the outstanding obiigations of NPC arising from loans, 
issuances of bonds, securities, and other instruments of indebtedness.
According to Section 49 of Republic Act (R.A.) No. 9136, PSALM has twenty 
(25) years from the effectivity of the Electric Power Industry Reform Act (EPIRA) of 
2001 to fulfill its mandates. After the end of its corporate life in 2026, all the assets it 
holds and outstanding liabilities will revert to and be assumed by the national 
government.
By extending the corporate life of PSALM, it will be able to manage its remaining 
contractual obligations, particularly those whose terms shall end beyond June 2026. 
The national government will not have to immediately absorb PSALM's outstanding 
financial obligations by June 2026. The deferral of the turnover of its unpaid financial 
obligations would give allowance to PSALM to create a privatization plan that is 
complete, accurate and well organized. An extended corporate life will aid PSALM to 
secure better terms for its borrowings for the next several years.
Thus, this bill extends the corporate life of PSALM whose corporate existence 
is due to expire on June 26, 2026 in order for the corporation to fully and successfully 
accomplish its mandate by giving it more time to dispose of assets to settle the 
obligations of the industry. The measure seeks to amend R.A. No. 9136 by extending 
PSALM's corporate life by 30 years until June 26, 2056.
Hence, the immediate approval of this bill is earnestly sought.
JOSEPH VICTOR G. EJERCITO


NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
S. No. 1975.
of till' S>i'tn'farp
23 flAR-7 P4 35
INTRODUCED BY SENATOR JOSEPH VICTOR G. EJERCITO
AN ACT
EXTENDING THE CORPORATE LIFE AND STRENGTHENING THE POWERS OF 
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION 
FOR ANOTHER THIRTY (30) YEARS, AMENDING FOR THE PURPOSE 
SECTIONS 47, 49, 51, 55, 63, AND 70 OF REPUBLIC ACT NO. 9136, 
OTHERWISE KNOWN AS THE, "ELECTRIC POWER INDUSTRY REFORM ACT 
OF 2001", AND FOR OTHER PURPOSES
1 
Section 1. Section 47, Chapter V of Republic Act No. 9136, otherwise known as
2 
the "Electric Power Industry Reform Act of 2001" or the EPIRA Law, is hereby amended
3 
to read as follows:
4 
"SEC. 47. NPC Privatization. - [Except for the assets of SPUG,} The generation
5 
assets, real estate, and other disposable assets as well as IPP contracts of NPC,
6 
INCLUDING THE ASSETS OF THE SPUG, shall be privatized in accordance
7 
with this Act. Within six (6) months from the effectivity of this Act, the PSALM
8 
Corp. shall submit a plan for the endorsement by the Joint Congressional Power
9 
Commission and the approval of the President of the Philippines, on the total
10 
privatization of the generation assets, real estate, other disposable assets as
11 
well as existing IPP contracts of NPC and thorGaftor, implomont the somo,-4ft-
12 
accordance with the following guidclinGS, oxcopt-as provided for in Paragraph
13 
(f) herein: FOR THE PRIVATIZATION OF THE ASSETS OF THE SPUG,
14 
PSALM CORP. SHALL, WITHIN SIX (6) MONTHS FROM THE ISSUANCE
15 
OF GUIDELINES BY THE GCG ON THE STANDARDS SET FORTH IN
16 
SECTION 50, SUBMIT A PLAN FOR THE ENDORSEMENT BY THE JOINT
17 
PROFESSIONAL ENERGY COMMISSION AND THE APPROVAL OF THE


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PRESIDENT OF PHILIPPINES, ON THE TOTAL PRIVATIZATION THE 
ASSETS OF THE SPUG. PSALM SHALL, THEREAFTER, IMPLEMENT THE 
AFOREMENTIONED PRIVATIZATION PLANS, IN ACCORDANCE WITH 
THE FOLLOWING GUIDELINES:
(a) The privatization value to the National Government of the generation assets, 
real estate, other disposable assets, INCLUDING THE ASSETS OF THE 
SPUG, as well as IPP contracts shall be optimized;
XXX
(c) The NPC plants, INCLUDING THE ASSETS OF THE SPUG, and/or IPP 
contracts assigned to IPP Administrators, its related assets and liabilities, shall 
be grouped in a manner which shall promote the viability of the resulting 
generation companies (GENCOs) ensure economic efficiency, encourage 
competition, foster reasonable electricity rates and create market appeal to 
optimize returns to the government from the sale and disposition of such assets 
in a manner consistent with the objectives of this Act.
XXX
(f) The Agus and the Pulangui complexes in Mindanao shall be excluded from 
among the generation companies that will be initially privatized. Their 
ownership shall be transferred to the PSALM Corp. and both shall continue to 
be operated by the NPC OR ANY QUALIFIED THIRD-PARTY AS MAY BE 
DETERMINED BY PSALM CORP. Said complexes may be privatized not 
earlier than ten (10) years from the effectivity of this Act, and except for Agus 
III, shall not be subject to Build-Operate-Transfer (B-O-T), Build-Rehabilitate- 
Operate-Transfer (B-R-O-T) and other variations thereof pursuant to Republic 
Act No. 6957, as amended by Republic Act No. 7718. The privatization of Agus 
and Pulangui complexes shall be left to the discretion of PSALM Corp. in 
consultation with Congress;
XXX
(i) Not later than three (3) years from the effectivity of this Act, and in no case 
later than the initial implementation of open access, at ieast seventy percent 
(70%) of the total capacity of generating assets of NPC and of the total capacity 
of the power plants under contract with NPC iocated in Luzon and Visayas shall


1 
have been privatized: Provided, That any unsold capacity, INCLUDING THE
2 
ASSETS OF THE SPUG, shall be privatized [not later than eight (8) years from
3 
the Gffectivity] of in accordance with this Act; and xxx"
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Section 2. The first paragraph of Section 49, Chapter VI of R.A. No. 9136, is
5 
hereby amended to read as follows:
6 
"SEC. 49. Creation of Power Sector Assets and Liabilities Management
7 
Corporation - There is hereby created a government-owned and -controlled
8 
corporation to be known as the "Power Sector Assets and Liabilities
9 
Management Corporation", hereinafter referred to as the "PSALM Corp.", which
10 
shall take ownership of all existing NPC generation assets, liabilities, IPP
11 
contracts, real estate and all other disposable assets, INCLUDING THE
12 
ASSETS OF THE SPUG. All outstanding obligations of the NPC arising from
13 
loans, issuances of bonds, securities and other instruments of indebtedness
14 
shall be transferred to and assumed by the PSALM Corp. within one hundred
15 
eighty (180) days from the approval of this Act."
16 
Section 3. Section 50, Chapter VI of Republic Act No. 9136, otherwise known
17 
as the "Electric Power Industry Reform Act of 2001" or the EPIRA, is hereby amended
18 
to read as follows:
19 
"SEC. 50. Purpose and Objective, Domicile and Term of Existence. - The
20 
principal purpose of the PSALM Corp. is to manage the orderly sale, disposition,
21 
and privatization of NPC generation assets, real estate and other disposable
22 
assets, and IPP contracts, INCLUDING THE ASSETS OF THE SPUG, with
23 
the objective of liquidating all NPC financial obligations and stranded contract
24 
costs in an optimal manner.
25 
The PSALM Corp. shall have its principal office and place of business within
26 
Metro Manila.
27 
The PSALM Corp. shall exist for a period of twenty-five (25) years from the
28 
effectivity of this Act, ITS CORPORATE LIFE SHALL BE EXTENDED FOR
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ANOTHER THIRTY (30) YEARS FROM THE EXPIRATION OF ITS
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ORIGINAL TERM ON 26 JUNE 2026, UNLESS OTHERWISE PROVIDED
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BY LAW. PROVIDED, THAT, PSALM CORP. MAY UNDERGO
32 
RESTRUCTURING, REORGANIZATION OR RIGHTSIZING, AS IT MAY


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DEEM PROPER, PURSUANT TO EXISTING RULES AND REGULATIONS. 
THE PSALM CORP. MAY ALSO BE ABOLISHED DURING ITS EXTENDED 
TERM OF EXISTENCE, PURSUANT TO SECTION 5 OF REPUBLIC ACT 
NO. 10149, OTHERWISE KNOWN AS THE "GOCC GOVERNANCE ACT 
OF 2011". PROVIDED, FURTHER, that all assets held by it, all moneys and 
properties belonging to it, and all its liabilities outstanding upon its abolition or 
the expiration of its term of existence shall revert to and be assumed by the 
National Government.
SHOULD IT BE DETERMINED PURSUANT TO REPUBLIC ACT NO. 10149 
THAT THE ABOLITION OF PSALM CORP. IS TO THE BEST INTEREST OF 
THE STATE, THE ABOLITION OF PSALM CORP. SHALL TAKE EFFECT 
UPON THE APPROVAL OF THE PRESIDENT OF THE PHILIPPINES OF 
THE RECOMMENDATION OF THE GOVERNANCE COMMISSION FOR 
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS (GCG) TO 
ABOLISH THE PSALM CORP., THROUGH AN EXECUTIVE ORDER 
ISSUED FOR SUCH PURPOSE; PROVIDED, THAT THE ABOLITION OF 
PSALM CORP. SHALL BE IMPLEMENTED BY THE GCG, UNLESS THE 
PRESIDENT DESIGNATES ANOTHER AGENCY TO IMPLEMENT SUCH 
ABOLITION.
IN ADDITION TO THOSE SET FORTH UNDER SECTION 5(A) OF THE 
REPUBLIC ACT NO. 10149, THE PSALM CORP. MAY ALSO BE 
ABOLISHED DURING ITS EXTENDED PERIOD OF EXISTENCE BASED 
ON THE FOLLOWING GUIDING STANDARDS:
1. THE SALE, DISPOSITION, AND PRIVATIZATION OF ALL THE NPC 
GENERATION ASSETS, AND IPP CONTRACTS;
2. LIQUIDATION OF ALL 2. LIQUIDATION OF ALL THE NPC FINANCIAL 
OBLIGATIONS, STRANDED DEBTS AND STRANDED CONTRACT COSTS 
OR ABSORPTION OF SUCH BY THE NATIONAL GOVERNMENT WITH 
THE CORRESPONDING PRIVATIZATION PROCEEDS RECEIVABLE; 
AND,
3. THE PRIVATIZATION OF ALL POWER GENERATION ASSETS AND 
ASSOCIATED POWER DELIVERY SYSTEMS OF THE SPUG.


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Section 4. Section 51, Chapter VI of Republic Act No. 9136 is hereby amended
2 
to read as follows:
3 
"SEC. 51. Powers. - The Corporation shall, in the performance of its functions
4 
and for the attainment of its objective, have the following powers:
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(a) To formulate and implement a program for the sale and privatization of the
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NPC assets and IPP contracts, INCLUDING THE ASSETS OF THE SPUG, and
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the liquidation of NPC debts and stranded contract costs, such liquidation to be
8 
compieted within the term of existence of the PSALM Corp.;
9 
XXX
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(e) To liquidate the NPC stranded contract costs and stranded debts utilizing
11 
proceeds from sales and other property contributed to it, inciuding the proceeds
12 
from the universal charge:
13 
XXX
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(m) To restructure the sale, privatization or disposition of NPC assets, including
15 
the assets of the SPUG, and IPP contracts and/or their energy output based on
16 
such terms and conditions which shall optimize the value and sale prices of said
17 
assets."
18 
Section 5. Section 55, Chapter VI of Republic Act No. 9136 is hereby amended
19 
to read as follows:
20 
"SEC. 55. Property of the PSALM Corp. - The following funds, assets,
21 
contributions and other property shall constitute the property of the PSALM
22 
Corp.:
23 
A. The generation assets, real estate, IPP contracts, other disposable assets of
24 
NPC. Provided, that, ownership of the assets of the SPUG shall remain with NPC
25 
pending privatization;
26 
B. Proceeds from the sale or disposition of such assets and the residual assets
27 
from B-O-T, R-O-T, and other variations thereof. PROVIDED, HOWEVER,
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THAT THE PROCEEDS FROM THE SALE OR DISPOSITION OF THE
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ASSETS OF THE SPUG SHALL CONSTITUTE THE PROPERTY OF THE
30 
NPC; PROVIDED, FURTHER, THAT, UPON RECEIPT OF PROCEEDS
31 
FROM THE SALE OR DISPOSITION OF THE ASSETS OF THE SPUG, THE
32 
NPC SHALL REMIT THE SAME TO THE NATIONAL GOVERNMENT, NET


1 
OF THE SEPARATION BENEFITS OF AFFECTED PERSONNEL
2 
PURSUANT TO SECTION 63 OF THIS ACT;
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C. Transfers from the National Government;
4 
D. Proceeds from loans incurred to restructure or refinance PC's transferred
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liabilities: Provided, however, That all borrowings shall be fully paid for by the
6 
end of the life of the PSALM Corp.;
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E. Proceeds from the universal charge allocated for stranded contract costs and
8 
the stranded debts of NPC;
9 
F. Net profit of NPC;
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G. Net profit of TRANSCO;
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H. Official assistance, grants, and donations from external sources; and
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I. Other sources of funds as may be determined by PSALM Co necessary for
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the above-mentioned purposes.
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Section 6. Section 63, Chapter VIII of Republic Act No. 9136, otherwise known
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as the "Electric Power Industry Reform Act of 2001" or the EPIRA, is hereby amended
16 
to read as follows:
17 
"SEC. 63. Separation Benefits of Officials and Employees of Affected Agencies.
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- National government employees displaced or separated from the service as a
19 
result of the restructuring of the electricity industry and privatization of NPC
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assets pursuant to this Act, shall be entitled to either a separation pay and
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other benefits in accordance with existing laws, rules or regulations or be
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entitled to avail of the privileges provided under a separation plan which shall
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be one and one-half month salary for every year of service in the government:
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Provided, however. That those who avail of such privilege shall start their
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government service anew if absorbed by any government-owned successor
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company. In no case shall there be any diminution of benefits under the
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separation plan until the full implementation of the restructuring and
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privatization. PROVIDED, FURTHER, THAT THE SEPARATION BENEFITS
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OF ANY NPC PERSONNEL WHO WILL BE DISPLACED OR SEPARATED
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DUE TO THE PRIVATIZATION OF THE ASSETS OF THE SPUG, SHALL HE
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FOR THE ACCOUNT OF THE NPC AND SHALL BE SETTLED FROM THE
32 
PROCEEDS OF SUCH PRIVATIZATION.


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as
to
Displaced or separated personnel as a result of the privatization, if qualified, 
shall be given preference in the hiring of the manpower requirements of the 
privatized companies.
The salaries of empioyees of NPC shali continue to be exempt from the 
coverage of Republic Act No. 6758, otherwise known as 'The Salary 
Standardization Act". With respect to employees who are not retained by NPC, 
the government, through the Department of Labor and Employment, shall 
endeavor to implement re-training, job counseling, and job placement 
programs.
PERSONNEL OF PSALM CORP. WHO MAY BE DISPLACED OR 
SEPARATED AS A RESULT OF PSALM CORP.'S RESTRUCTURING, 
REORGANIZATION AND RIGHTSIZING DURING ITS TERM OF 
EXISTENCE, SHALL BE ENTITLED TO EITHER A SEPARATION PAY AND 
OTHER BENEFITS IN ACCORDANCE WITH EXISTING LAWS, RULES OR 
REGULATIONS OR BE ENTITLED TO AVAIL OF THE PRIVILEGES 
PROVIDED UNDER A SEPARATION PLAN, WHICH SHALL BE ONE AND 
ONE-HALF MONTH SALARY FOR EVERY YEAR OF SERVICE IN THE 
GOVERNMENT: PROVIDED, HOWEVER, THAT THOSE WHO AVAIL OF 
SUCH PRIVILEGE SHALL START THEIR GOVERNMENT SERVICE ANEW 
IF ABSORBED BY ANY GOVERNMENT OWNED SUCCESSOR COMPANY. 
Section 7. Section 70, Chapter VI of Republic Act No. 9136, otherwise known 
the "Electric Power Industry Reform Act of 2001" or the EPIRA, is hereby amended 
read as follows:
"SEC. 70. Missionary Electrification. - [Notwithstanding the divestment and/or 
privatization of NPC assets, IPP contracts and spun off corporations,] NPC shali, 
PRIOR TO THE TOTAL PRIVATIZATION OF THE ASSETS OF THE SPUG 
BY PSALM CORP., remain as a National Government-owned and -controlled 
corporation to perform the missionary electrification function through the Smali 
Power Utilities Group (SPUG) and shall be responsible for providing power 
generation and its associated power deiivery systems in areas that are not 
connected to the transmission system. The missionary electrification function 
shall be funded from the revenues from sales in missionary areas and from the


1 
universal charge to be collected from all electricity end-users as determined by
2 
the ERC."
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Section 8. Implementing Rules and Regulations.- The DOE shall, in consultation
4 
with relevant government agencies, promulgate the Implementing Rules and
5 
Regulation (IRR) of the Act within six (6) months from the effectivity of this Act.
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The GCG shall issue guidelines for the determination and implementation of
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Section 3 within six (6) months from the effectivity of this Act.
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Section 9. Separability Clause.- Should any provision or section of this Act be
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subsequently declared invalid or unconstitutional, the other provisions hereof which
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are not affected thereby shall remain in full force and effect.
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Section 10. Repealing Clause. - All laws, decrees, executive orders,
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proclamations, rules and regulations, and issuances, or parts thereof which are
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inconsistent with the provisions of this Act, are hereby repealed, amended or modified
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accordingly. The provisions of Republic Act No. 9136, otherwise known as the "Electric
15 
Power Industry Reform Act of 2001" shall continue to have full force and effect, except
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insofar as they are inconsistent with this Act.
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Section 11. Effectivity-Vc\\s Act shall take effect fifteen (15) days following the
18 
completion of its publication in the Official Gazette or in at least two (2) newspapers
19 
of general circulation.
Approved,