FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHIILIPPINES 
) 
) 
) 
Second Regular Session 
'11 
SEP 20 
f> 1\ :01 
SENATE 
S. B. No. 2969 
REeL,,' 
Introduced by Senator Ralph G. Recto 
EXPLANATORY NOTE 
Electric Cooperatives (ECs) provide vital services to its members and consumers within 
its coverage areas. They are primarily organized to undertake power generation, acquisition and 
operation of sub-transmission or distribution to its members. There are two types of electric 
cooperatives: those registered with the Cooperatives Development Authority (CDA) and those 
registered with the National Electrification Administration (NEA). Currently, only those ECs 
registered with the CDA are granted tax exemptions and other privileges leading to an uneven 
playing field for those registered with the NEA. 
This bill proposes to equalize the opportunities for all ECs so that citizens are provided 
access to reasonably-priced electricity in consonance with the Energy Reform Agenda under the 
Philippine Development Plan in the short-term and achievement of a reliable and secure supply 
of energy in the long-term. With total peak demand expected to grow by 4.5% every year, the EC 
sector should be equipped to undertake its mandates financially and technologically. 
In order to provide financial and technical assistance to electric cooperatives and achieve 
energy security, this bill proposes the following amendments to Presidential Decree No. 269, as 
amended, which created the NEA: 
• 
• 
• 
• 
• 
• 
NEA shall have supervisory functions over ECs and exercise step in rights in cases of 
ailing ECs by allowing the NEA to convert the ailing ECs to either a stock cooperative 
registered with the CDA or a stock corporation registered with the Securities and 
Exchange Commission (SEC); 
NEA shall be exempt from payment of all taxes, duties, fees, imposts, charges, costs and 
restrictions imposed by the government including local government units, charges under 
the Tariff and Customs Code and filing and service fees and other charges or cost in any 
court or administrative proceeding; 
ECs shall be granted permanent exemption from income tax, and all national, local and 
municipal taxes and fees subject to conditions; 
The Court of Appeals shall have the exclusive jurisdiction to review or set aside any 
order, ruling or decision of the NEA; 
The long-term business and economic viability of ECs shall be guaranteed by ensuring 
the independence of the Board of Directors and Officers of ECs and insulating their 
operations from local politics as much as practicable; and 
ECs shall be entitled to Congressional allocations, grants, subsidiaries and other financial 
assistance for ruml electrification. 


By empowering NEA to restructure ailing ECs, this bill seeks to resolve and forestall the 
accumulation of loans by the EC sector that hamper the expansion of their facilities and saddle 
their consumers with higher prices from the additional impositions due to the debts of ECs. The 
government had already condoned P18.1 Billion of the EC loans through the Power Sector 
Assets and Liabilities Management Corporation. The accumulated debts were incurred for power 
supply purchases from generation plants operated by the National Power Corporation, Value-
Added Tax and disputed billings lodged with the Energy Regulatory Commission and others 
pending with the courts. The loan condonation led to reduction in rates charged by ECs to its 
customers from P.05 to P1.3507 per kilowatt hour. 
The proposed bill is also designed to empower the Ee sector to deal with the coming 
regime of retail competition and open access. All conditions for retail competition needed to take 
place are expected to be met in a few months, especially, (1) the privatization of at least 70% of 
the total capacity of generating assets of the NPC in Luzon and Visayas and (2) the transfer of 
management and control of at least 70% of power plants to Independent Power Producers 
Administrators. Likewise, the contestable market will also be able to participate in the open 
access scheme to be launched in December 26 this year. 
Electrification is one of the key components in the country's march out of poverty by 
stimulating the economy, health, education, settlements and infrastructures development, among 
others. Despite achieving 98 per cent electrification nationwide, the Philippines still experiences 
power outages with a supply deficit as large as 185 megawatt hour, as recently as last year. 
Strengthening ECs and the NEA shall greatly help ECs to service their coverage areas in step 
with the goal to achieve nationwide energy security. 
Approval of this bill, is urgently sought. 
'-, 
( 
RAL,rG.:~CTO 
, ' 
\/~' 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
) 
) 
) 
SENATE 
S. B. No. 2969 
~\ ;'-/·1 ';", 1 1, 
~"""" 
"", 
'11 
SEP 20 p 1 :01 
Introduced by Senator Ralph G. Rect:tl:~T: , ;,; i, \. ~-
AN ACT 
AMENDING PRESIDENTIAL DECREE NO. 269, AS AMENDED, OR THE NATIONAL 
ELECTIFICATION DECREE, RESTRUCTURING THE ELECTRIC COOPERATIVES, 
PRESCRIBING ADDITIONAL POWERS AND FUNCTIONS AND STRENGTHENING 
THE NATIONAL ELECTRIFICATION ADMINISTRATION AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. This Act shall be known as the "National Electrification Administration 
2 
Reform Act of 20 11." 
3 
SEC. 2. The Declaration of National Policy in Section 2 of Presidential Decree No. 269, 
4 
as amended, is hereby further amended to read as follows: 
5 
"Section 2. Declaration of National Policy. 
6 
"x x x. 
7 
"IN ADDITION TO THE FOREGOING, IT IS HEREBY DECLARED 
8 
THE POLICY OF THE STATE TO: 
9 
(A) PROMOTE SUSTAINABLE DEVELOPMENT IN RURAL AREAS 
10 
THROUGH RURAL ELECTRIFICATION; AND 
11 
(B) EMPOWER ELECTRIC COOPERATIVES. 
12 
THIS 
ACT 
SHALL 
ESTABLISH 
A 
FRAMEWORK 
FOR 
13 
INTRODUCING 
STRUCTURAL 
REFORMS 
TO 
THE 
NATIONAL 
14 
ELECTRIFICATION 
ADMINISTRATION 
AND 
ELECTRIC 
15 
COOPERATIVES." 
16 
SEC. 3. A new section is hereby added as Section 2-A to read as follows: 
17 
"SEC. 2-A. SCOPE. THE PROVISIONS OF THIS ACT SHALL APPLY 
18 
TO THE OPERATIONS OF ELECTRIC COOPERATIVES REGISTERED 
19 
WITH THE NATIONAL ELECTRIFICATION ADMINISTRATION, AND 
20 
THE COOPERATIVE DEVELOPMENT AUTHORITY." 
21 
SEC. 4. Section 3 of Presidential Decree No. 269, as amended, is hereby further 
22 
amended to read as follows: 
23 
"Section 3. Definitions. 
24 
"(a)xxx 
1 


"(k) x x x 
1 
2 
[(1) "Board of Power and Waterworks" shall mean Board of Power and 
3 
Waterworks or any successor board, agency or instrumentality that may hereafter 
4 
be established to perform the same or substantially similar functions.] 
5 
(L)[(m)]xxx 
6 
(M) [en)] x x x 
7 
(N)[(o)] x x x 
8 
(0) [(p)] xxx 
9 
[( q) "Congress" shall mean the President during his exercise of Martial Law, or 
10 
the National Assembly under the new Constitution of 1973, whichever is the case 
11 
at any given time.] 
12 
(P) 
ELECTRIC COOPERATIVE SHALL REFER TO AN ELECTRIC 
13 
DISTRIBUTION UTILITY ORGANIZED AND REGISTERED PURSUANT 
14 
TO PRESIDENTIAL DECREE NO. 269, REPUBLIC ACT NO. 9520, AND 
15 
OTHER RELATED LAWS. 
16 
(Q) 
DOE SHALL REFER TO THE DEPARTMENT OF ENERGY 
17 
CREATED UNDER REPUBLIC ACT NO. 7638. 
18 
(R) 
ERC 
SHALL 
REFER 
TO 
THE 
ENERGY 
REGULATORY 
19 
COMMISSION CREATED UNDER REPUBLIC ACT NO. 9136. 
20 
(S) 
EPIRA SHALL REFER TO REPUBLIC ACT NO. 9136 OR THE 
21 
ELECRTRIC POWER INDUSTRY REFORM ACT OF 2001. 
22 
(T) 
CDA 
SHALL 
REFER 
TO 
THE 
COOPERATIVE 
23 
DEVELOPMENT AUTHORITY CREATED UNDER REPUBLIC ACT 
24 
NO. 6939, AS AMENDED." 
25 
SEC. 5. Section 4 of Presidential Decree No. 269, as amended, is hereby further amended 
26 
to read as follows: 
27 
"Section 4. 
POWERS AND FUNCTIONS OF THE 
NATIONAL 
28 
ELECTRIFICATION ADMINISTRATION [NEA 
Authorities, 
Powers 
and 
29 
Directives.] 
30 
"(a) x x x 
31 
"xxx 
32 
"(o)xxx. 
33 
"FURTHER, TO STRENGTHEN THE ELECTRIC COOPERATIVES TO 
34 
THE CHANGES INTRODUCED BY EPIRA, THE NEA SHALL: 
35 
(A) SUPPORT 
THE 
CONVERSION 
OF 
EXISTING 
ELECTRIC 
36 
COOPERATIVES TO STOCK COOPERATIVES TO BE DULY 
37 
REGISTERED WITH THE CDA OR STOCK CORPORATION TO BE 
38 
DULY REGISTERED WITH THE SECURITIES AND EXCHANGE 
39 
COMMISSION; 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
(B) SUPERVISE 
THE 
OPERATIONS 
OF 
ALL 
ELECTRIC 
COOPERATIVES; 
(C) EXERCISE STEP-IN RIGHTS AS HEREIN DEFINED; 
(D) PROVIDE 
FINANCIAL 
AND 
TECHNICAL 
ASSISTANCE 
TO 
ELECTRIC COOPERATIVES; 
(E) PURSUE 
ELECTRIFICATION 
PROGRAMS 
THROUGH 
THE 
ELECTRIC COOPERATIVES; 
(F) ENJOY EXEMPTION FROM ALL TAXES, DUTIES, FEES, IMPOSTS 
AND OTHER CHARGES; 
(G) DEVOTE ALL RETURNS FROM ITS CAPITAL INVESTMENT TO 
ATTAIN THE OBJECTIVES OF THIS ACT; 
(H) RESTRUCTURE AILING ELECTRIC COOPERATIVES; 
(I) DEVELOP, SET, AND ENFORCE TECHNICAL AND FINANCIAL 
COMPLIANCE STANDARDS FOR THE EFFICIENT OPERATION OF 
ELECTRIC COOPERATIVES SUCH AS THE OBSERVANCE OF 
GOVERNMENT PROCUREMENT PROCEDURES AND ENFORCED 
THROUGH A MECHANISM OF INCENTIVES TO COMPLYING 
ELECTRIC COOPERATIVES AND DISINCENTIVES TO NON-
COMPLYING ELECTRIC COOPERATIVES; 
(J) IMPOSE 
ADMINISTRATIVE 
PENAL TIES 
AND 
WHEN 
WARRANTED, FILE CRIMINAL CASES AGAINST THOSE WHO 
VIOLATE 
THE 
PROVISIONS 
OF 
THIS 
ACT 
AND 
ITS 
IMPLEMENTING RULES; AND, 
(K)SERVE 
AS 
GUARANTOR 
TO 
QUALIFIED 
ELECTRIC 
COOPERATIVES 
FOR 
THEIR 
TRANSACTIONS 
FOR 
THE 
PURCHASE OF ELECTRICITY SUCH AS CO-SIGNING IN ELECTRIC 
SALES 
AGREEMENTS 
TO 
COMPLYING 
ELECTRIC 
COOPERATIVES." 
SEC. 6. A new section is hereby added as Section 4-A to read as follows: 
"SEC. 4-A. SUPERVISORY FUNCTIONS OF THE NATIONAL 
ELECTRIFICATION 
ADMINISTRATION 
OVER 
ELECTRIC 
COOPERATIVES. - IN THE EXERCISE OF ITS POWER OF SUPERVISION 
OVER ELECTRIC COOPERATIVES, NEA SHALL HAVE THE FOLLOWING 
POWERS: 
(A) ISSUE ORDERS, RULES AND REGULATIONS AND MOTU PROPIO 
OR UPON 
PETITION OF 
THIRD 
PARTIES, 
TO 
CONDUCT 
INVESTIGATIONS, REFERENDA AND OTHER SIMILAR ACTIONS 
IN ALL MATTERS AFFECTING SAID ELECTRIC COOPERATIVES; 
AND, 
3 


1 
(B) ISSUE 
PREVENTIVE 
AND/OR 
DISCIPLINARY 
MEASURES 
2 
INCLUDING BUT NOT LIMITED TO SUSPENSION AND/OR 
3 
REMOVAL AND REPLACEMENT OF ANY OR ALL OF THE 
4 
MEMBERS OF THE BOARD OF DIRECTORS, OFFICERS OR 
5 
EMPLOYEES OF THE ELECTRIC COOPERATIVE, AS THE NEA 
6 
MAY DEEM FIT AND NECESSARY AND TO TAKE ANY OTHER 
7 
REMEDIAL MEASURES AS THE LAW OR ANY AGREEMENT OR 
8 
ARRANGEMENT WITH NEA MAY PROVIDE. 
9 
IN THE EXERCISE OF ITS SUPERVISORY RIGHTS UNDER THIS 
10 
ACT, THE NEA MUST STRICTLY OBSERVE DUE PROCESS." 
11 
SEC. 7. A new section is hereby added as Section 4-B to read as follows: 
12 
"SEC. 4-B. THE NEA SHALL HAVE STEP-IN RIGHTS IN CASES OF 
13 
AILING ELECTRIC COOPERATIVES. UPON EXERCISING ITS STEP-IN 
14 
RIGHTS, 
THE 
NEA 
SHALL 
IMMEDIATELY 
TAKE 
OVER 
THE 
15 
OPERATIONS OF THE AILING ELECTRIC COOPERATIVE FROM THE 
16 
BOARD. DURING THE TAKE OVER, THE NEA MAY ALSO REMOVE 
17 
OFFICERS IN ORDER TO EFFECTIVELY MANAGE THE AFFAIRS OF THE 
18 
AILING COOPERATIVE. WITHIN A REASONABLE PERIOD UPON TAKE 
19 
OVER, THE NEA MAY CONVERT THE AILING ELECTRIC COOPERATIVE 
20 
TO EITHER A STOCK COOPERATIVE REGISTERED WITH THE CDA OR A 
21 
STOCK CORPORATION REGISTERED WITH THE SECURITIES AND 
22 
EXCHANGE COMMISSION. 
23 
IN THE DETERMINATION OF CONVERSION, THE NEA SHALL BE 
24 
GUIDED BY THE ABILITY TO PAY OF THE MEMBER-CONSUMERS OF 
25 
SAID ELECTRIC COOPERATIVE FOR THEIR SHARES IN THE STOCK 
26 
COOPERATIVE OR STOCK CORPORATION. 
27 
IN THE EXERCISE OF ITS STEP-IN RIGHTS UNDER THIS ACT, THE 
28 
NEA MUST STRICTLY OBSERVE DUE PROCESS. THE STEP-IN RIGHTS 
29 
MAY ONLY BE EXERCISED IN CASE OF FAILURE OF THE ELECTRIC 
30 
COOPERATIVE TO MEET OPERATIONAL STANDARDS SET BY NEA OR 
31 
IN 
OTHER 
ANALAGOUS 
INSTANCES 
SET 
FORTH 
IN 
THE 
32 
IMPLEMENTING RULES AND REGULATIONS OF THIS ACT." 
33 
SEC. 8. A new section is hereby added as Section 4-C to read as follows: 
34 
"SEC. 4-C. THE INSTITUTION OF A WRIT OF CERTIORARI OR 
35 
OTHER SPECIAL REMEDY IN ANY REGIONAL TRIAL COURT SHALL IN 
36 
NO CASE SUPERCEDE OR STAY ANY ORDER, RULING OR DECISION OF 
37 
THE NEA IN THE EXERCISE OF ITS RIGHTS UNDER THIS ACT UNLESS 
38 
THE COURT OF APPEALS SHALL SO DIRECT: PROVIDED, THAT SUCH A 
39 
STAY SHALL IN NO CASE EXCEED SIXTY (60) DAYS AND A BOND IN 
4 


1 
SUCH FORM AND AMOUNT ENOUGH TO COVER THE LIABILITIES 
2 
ARISING DURING THE PERIOD OF THE STAY SHALL BE POSTED: 
3 
PROVIDED, FURTHER, THAT THE COURT OF APPEALS SHALL RENDER 
4 
A DECISION ON THE CASE WITHIN SIXTY (60) DAYS FROM THE FILING 
5 
OF THE CASE." 
6 
SEC. 9. A new section is hereby added as Section 26-A of Presidential Decree No. 269, 
7 
as amended to read as follows: 
8 
"SEC. 26-A. INDEPENDENCE OF THE BOARD OF DIRECTORS 
9 
AND OFFICERS OF ELECTRIC COOPERATIVES. - TO ENSURE THE 
10 
LONG TERM BUSINESS AND ECONOMIC VIABILITY OF ELECTRIC 
11 
COOPERATIVES, THE OPERATIONS AND STRATEGIC PLANNING OF 
12 
ELECTRIC COOPERATIVES MUST AS MUCH AS PRACTICABLE BE 
13 
INSULATED FROM LOCAL POLITICS. 
14 
TOWARDS THIS END, NO PERSON SHALL BE APPOINTED AS AN 
15 
OFFICER OR BE ELIGIBLE TO RUN AS A BOARD MEMBER OF AN 
16 
ELECTRIC COOPERATIVE IF: 
17 
1) HE WAS A CANDIDATE IN THE PRECEDING ELECTION FROM 
18 
THE TIME OF APPOINTMENT OR FILING OF CANDIDACY FOR 
19 
THE BOARD; OR, 
20 
2) HE IS A RELATIVE UP TO THE FOURTH DEGREE OF AFFINITY 
21 
OR CONSANGUINITY OF AN INCUMBENT ELECTED OR 
22 
APPOINTED OFFICIAL OF GOVERNMENT." 
23 
SEC. 10. A new section is hereby added as Section 26-B of Presidential Decree No. 269, 
24 
as amended to read as follows: 
25 
"SEC. 26-B. FIT AND PROPER RULE. - TO ENSURE THAT THE 
26 
MANAGEMENT AND OPERATIONS OF ELECTRIC COOPERATIVES ARE 
27 
CARRIED OUT WITH DUE REGARD TO ITS ECONOMIC VIABILITY, THE 
28 
NEA 
SHALL 
PRESCRIBE, 
PASS 
UPON 
AND 
REVIEW 
THE 
29 
QUALIFICATIONS 
AND 
DISQUALIFICATIONS 
OF 
INDIVIDUALS 
30 
APPOINTED OR ELECTED TO ELECTRIC COOPERATIVES AND 
31 
DISQUALIFY THOSE FOUND UNFIT. 
32 
AFTER DUE NOTICE TO THE BOARD OF DIRECTORS AND 
33 
OFFICERS OF THE ELECTRIC COOPERATIVE, NEA MAY DISQUALIFY, 
34 
SUSPEND OR REMOVE ANY DIRECTOR OR OFFICER WHO COMMITS 
35 
AN ACT WHICH RENDER HIM UNFIT FOR THE POSITION. 
36 
IN DETERMINING WHETHER AN INDIVIDUAL IS FIT AND 
37 
PROPER TO HOLD A POSITION OF A DIRECTOR OR OFFICER OF AN 
38 
ELECTRIC COOPERATIVE, REGARD SHALL BE GIVEN TO HIS 
5 


1 
INTEGRITY, 
EXPERIENCE, 
EDUCATION, 
TRAINING 
AND 
2 
COMPETENCE." 
3 
SEC. 11. A new section is hereby added as Section 32-A to read as follows: 
4 
"SEC. 32-A. REGISTRATION AS STOCK COOPERATIVES -
TO 
5 
FOSTER GREATER ACCOUNTABILITY, ALL ELECTRIC COOPERATIVES 
6 
MAY OPT TO REGISTER WITH THE CDA AND SUCH REGISTRATION 
7 
SHALL BE FOR THE SOLE PURPOSE OF AVAILING THE TAX 
8 
INCENTIVES CONTAINED IN THE COOPERATIVE CODE OF THE 
9 
PHILIPPINES. 
HOWEVER, 
ELECTRIC 
COOPERATIVES 
MUST 
10 
NEVERTHELESS SUBMIT TO THE REPORTORIAL AND DOCUMENTARY 
11 
REQUIREMENTS OF THE CDA. 
12 
EXISTING ELECTRIC COOPERATIVES MAY LIKEWISE OPT TO 
13 
REGISTER AS STOCK CORPORATIONS WITH THE SECURITIES AND 
14 
EXCHANGE COMMISSION. HOWEVER, ELECTRIC COOPERATIVES 
15 
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION 
16 
SHALL NO LONGER ENJOY THE INCENTIVES CONTAINED UNDER THIS 
17 
ACT." 
18 
SEC. 12. A new section is hereby added as Section 32-B to read as follows: 
19 
"SEC. 32-B. ROLE OF THE COOPERATIVE DEVELOPMENT 
20 
AUTHORITY OVER ELECTRIC COOPERATIVES -
THE CDA SHALL 
21 
SERVE 
AS 
A 
REGISTRY 
OF 
ELECTRIC 
COOPERATIVES. 
THE 
22 
RESOLUTION OF INTRA-COOPERATIVE DISPUTES INVOLVING THE 
23 
OPERATIONS 
AND 
FINANCIALS 
OF 
ELECTRIC 
COOPERATIVES 
24 
INCLUDING MANAGEMENT CONCERNS RELATED THERETO SHALL BE 
25 
WITH THE NEA." 
26 
SEC. 13. A new section is hereby added as Section 32-C to read as follows: 
27 
"SEC. 32-C. ENTITLEMENTS OF ELECTRIC COOPERATIVES. -
28 
CONSISTENT WITH THE DECLARED POLICY OF THIS ACT, THE 
29 
FOLLOWING ARE ADDITIONAL ENTITLEMENTS TO BE ENJOYED BY 
30 
ELECTRIC COOPERATIVES: 
31 
(A)TO BE ENTITLED TO CONGRESSIONAL ALLOCATIONS, GRANTS, 
32 
SUBSIDIARIES AND OTHER FINANCIAL ASSISTANCE FOR RURAL 
33 
ELECTRIFICATION; 
34 
(B) TO 
A V AIL 
OF 
PREFERENTIAL 
RIGHTS 
GRANTED 
TO 
35 
COOPERATIVES UNDER REPUBLIC ACT NO. 7160 OTHERWISE 
36 
KNOWN AS THE LOCAL GOVERNMENT CODE, AND OTHER 
37 
RELATED LAWS; AND, 
38 
(C) TO RECEIVE, ALL SUBSIDIES, GRANTS, AND OTHER ASSISTANCE 
39 
THAT SHALL FORM PART OF THE DONATED CAPITAL AND FUNDS 
6 


1 
OF THE ELECTRIC COOPERATIVES, AND AS SUCH, IT SHALL NOT 
2 
BE SOLD, TRADED NOR BE DIVIDED INTO SHARE HOLDINGS AT 
3 
ANY 
TIME; 
TI-IESE 
DONA TED 
CAPITAL/FUND 
SHALL 
BE 
4 
VALUATED FOR THE SOLE PURPOSE OF DETERMINING THE 
5 
EQUITY, PARTICIPATION OF THE MEMBERS; PROVIDED THAT THE 
6 
CASE OF DISSOLUTION OF THE ELECTRIC COOPERATIVE, SAID 
7 
DONATED CAPITAL SHALL BE SUBJECT TO ESCHEAT. 
8 
AS AN INCENTIVE TO ELECTRIC COOPERATIVES COMPLYING 
9 
WITH ITS DIRECTIVES OR ARE MANAGED EFFECTIVELY AND 
10 
EFFICIENTLY, THE NEA MAY PRIORITIZE ELECTRIC COOPERATIVES 
11 
IN THE GRANTING OF THE ENTITLEMENTS." 
12 
SEC. 14. A new section is hereby added as Section 64-A to read as follows: 
13 
"SEC. 64-A. RULES AND REGULATIONS. - WITHIN SIXTY (60) 
14 
DAYS FROM THE EFFECTIVITY OF THIS ACT, THE DOE SHALL, IN 
15 
COORDINATION WITH THE NEA AND THE CDA, CONDUCT PUBLIC 
16 
HEARINGS AND ISSUE SUCH RULES AND REGULATIONS AS MAY BE 
17 
NECESSARY TO IMPLEMENT THIS ACT." 
18 
SEC. 15. A new section is hereby added as Section 64-B to read as follows: 
19 
"SEC. 64-B. PENALTIES. -
ANY PERSON WHO WILLFULLY 
20 
VIOLATES ANY RULE OR REGULATIONS PROMULGATED PURSUANT 
21 
TO 
THE AUTHORITY GRANTED 
IN THIS 
ACT 
SHALL, UPON 
22 
CONVICTION BE PUNISHED BY A FINE NOT LESS THAN TEN 
23 
THOUSAND PESOS (P10,000.00) BUT NOT MORE THAN FIVE HUNDRED 
24 
THOUSAND PESOS (P500,000.00) OR BY IMPRISONMENT OF NOT LESS 
25 
THAN SIX (6) MONTHS BUT NOT MORE THAN ONE (1) YEAR OR BOTH, 
26 
AT THE DISCRETION OF THE COURT: PROVIDED, THAT IF THE 
27 
VIOLATION IS COMMITTED BY A JURIDICAL PERSON, THE PENALTY 
28 
HEREIN SHALL BE IMPOSED UPON THE OFFICIAL AND/OR EMPLOYEE 
29 
THEREOF RESPONSIBLE FOR THE VIOLATION: PROVIDED, FURTHER, 
30 
THAT IF THE VIOLATION IS COMMITTED BY A GOVERNMENT 
31 
OFFICIAL OR EMPLOYEE INCLUDING THOSE IN GOVERNMENT-
32 
OWNED OR CONTROLLED CORPORATIONS, HE SHALL IN ADDITION 
33 
TO THE PENALTY AS PROVIDED HEREIN BE SUBJECTED TO 
34 
ADMINISTRATIVE DISCIPLINARY ACTION." 
35 
SEC. 16. Repealing Clause. - Any provision oflaw, presidential decree, executive order, 
36 
or rules and regulations inconsistent with the provisions of this Act or with the rules and 
37 
regulations issued pursuant thereto is hereby repealed or modified accordingly. 
38 
SEC. 17. Separability Clause. - If any provision of this Act is declared invalid or 
39 
unconstitutional, the other provisions not affected thereby shall remain valid and subsisting. 
7 


1 
SEC. 18. Effectivity. - This Act shall take effect immediately upon publication in at least 
2 
two (2) newspapers of general circulation or in the Official Gazette. 
3 
Approved, 
8