NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
)
)
SENATE
S. No. 2698
of tli:' - ■
24 MAY 22 P5 :22
RECEiVcD u"
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO
AN ACT
PROVIDING FOR THE CONDONATION OF UNPAID OBLIGATIONS ON THE 
POWER CONSUMPTION OF THE PUBLIC UTILITIES DEPARTMENT - 
OLONGAPO CITY TO THE POWER SECTOR ASSETS AND LIABILITIES 
MANAGEMENT CORPORATION
EXPLANATORY NOTE
In 2013, the City Government of Olongapo privatized its Public Utilities 
Department (PUD), which served as the city's local power distributor. Unfortunately, 
this left the City with a debt which at present amounts to Php7,675,579,299.64 due 
the continued accrual of interests. This debt was incurred through years of non­
payment to the Power Sector Assets and Liabilities Management (PSALM) Corporation 
despite collecting payment from its consumers.
This measure seeks to condone the outstanding debt of the City owed to 
PSALM. The City's annual budget is only about Two Billion Pesos. Thus, the debt takes 
up a substantial part in the City's annual appropriations. Condoning this debt would 
allow the City to allocate its resources in the delivery of better and more services to 
its constituents. It means that the City can allocate more resources for schools, 
hospitals, and other public infrastructures.
In view of the foregoing, the immediate passage of this bill is sought.
JOSEPH VICTOR G. EJERCITO


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
24 MAY 22 P5 :22
SENATE
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO
AN ACT
PROVIDING FOR THE CONDONATION OF UNPAID OBLIGATIONS ON THE 
POWER CONSUMPTION OF THE PUBLIC UTILITIES DEPARTMENT - 
OLONGAPO CITY TO THE POWER SECTOR ASSETS AND LIABILITIES 
MANAGEMENT CORPORATION
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Upon the effectivity of this Act, all outstanding financial obligations
2 
of the Public Utilities Department (PUD) - Olongapo City to the Power Sector Assets
3 
and Liabilities Management (PSALM) Corporation, including Value-Added Taxes,
4 
Generation Rate Adjustment Mechanism, Incremental Currency Exchange Rate
5 
Adjustment, Deferred Accounting Adjustments charges. Automatic Cost Recovery
6 
Mechanism fuel, purchased power cost adjustment, foreign exchange adjustment and
7 
true-up adjustment charges representing the power consumption of PUD - Olongapo
8 
City, are hereby condoned.
9 
Sec. 2. Within sixty (60) days from the effectivity of this Act, the Department
10 
of Finance (DOF) shall, in coordination with PSALM, promulgate the necessary rules
11 
and regulations for the effective implementation of this Act. Taking into account the
12 
legislative intent to authorize a condonation of unpaid obligations, the said rules and
13 
regulations shall not entail additional requirements that shall negate the purpose of
14 
this Act: Provided, That failure of the DOF to promulgate the said rules and regulations
15 
shall not prevent the implementation of this Act sixty (60) days after its effectivity:
16 
Provided, further. That the DOF shall require the PSALM to submit bi-annually a list of
17 
delinquent accounts and demands made for payment from electric cooperatives and
18 
other clients.


1 
Sec. 3. If any provision of this Act is declared unconstitutional or invalid, the
2 
other parts or provisions hereof which are not affected thereby shall continue to be in
3 
full force and effect.
4 
Sec. 4. All laws, decrees, executive orders and issuances, rules and regulations,
5 
or parts thereof inconsistent with the provisions of this Act are hereby repealed or
6 
modified accordingly.
7 
Sec. 5. This Act shall take effect after fifteen (15) days following its publication
8 
in the Official Gazette or in at least two (2) newspapers of general circulation.
9
10 
Approved,