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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO.  ____ 
Introduced by Representative Juan Miguel Macapagal Arroyo 
EXPLANATORY NOTE 
Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act 
(EPIRA), provides that one of the policies of the State is to have an orderly and transparent 
privatization of the assets and liabilities of the National Power Corporation (NPC).  Towards 
this end, EPIRA created the Power Sector Assets and Liabilities Management (PSALM) 
Corporation in 2001, a government-owned and -controlled corporation, with a corporate life 
of twenty-five (25) years which is due to expire on June 26, 2026.   
PSALM has the principal 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, including stranded debts (SD) and stranded contract costs (SCC), which were 
transferred to and assumed by PSALM pursuant to the EPIRA.  At the end of PSALM’s life, 
all its assets and outstanding debts and IPP contract costs will revert to and be assumed by the 
National Government (NG).  
One of the generation assets for privatization is the Agus-Pulangi Hydropower Plant 
Complex. This Complex is planned to be rehabilitated prior to privatization to further 
contribute to energy security and ensure better value for the government. Considering that 
completion of the rehabilitation will necessarily extend beyond the original corporate life of 
PSALM, it is imperative that PSALM be legally subsisting and operational during the said 
rehabilitation, including the duration of any loan related to such rehabilitation.  
By extending the corporate life of PSALM, it will also be able to manage its remaining 
contractual obligations, particularly those whose terms shall end beyond June 2026. The NG 
will not have to immediately absorb PSALM’s outstanding financial obligations by June 
2026. The turnover to the NG of the financial obligations left unpaid would be delayed and 
would allow PSALM to create a privatization plan that is complete, accurate and well 
organized. Furthermore, the NG would have substantially recovered from the pandemic so 
that the economy will have a bigger absorptive capacity once PSALM’s corporate life ends. 
A longer corporate life will enable PSALM secure better terms for its borrowings for the 
next several years. PSALM will have more flexibility negotiating for better and longer-term 
financing for better management of liquidity risks.  
August 19, 2021
9:19 am
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PSALM will be able to maximize and fully utilize the PHP208 Billion Murang 
Kuryente Act (MKA) fund allocation and fully collect the current Universal Charge-Stranded 
Debts (UC-SD) currently being charged to end-users. Extending the life of PSALM will 
provide adequate time until the fiscal space of NG will be able to accommodate a bigger 
budget under the MKA to cover the SCC and SD.  
Aside from the reduction, if not elimination, of NPC’s financial obligations, the successful 
privatization of NPC’s assets will help PSALM in avoiding operational losses from expensive 
power plants and IPP contracts. Also, once the assets are sold, the government will be able to 
use the proceeds to settle the debts of NPC, thus helping reduce the country's consolidated 
public sector deficit.  
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. 
Given the foregoing, the immediate passage of this measure is urgently sought. 
 JUAN MIGUEL MACAPAGAL ARROYO 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO.  ____ 
Introduced by Representative Juan Miguel Macapagal Arroyo 
AN ACT 
EXTENDING THE CORPORATE LIFE OF AND STRENGTHENING THE  
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION, 
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9136, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1.  Section 50, Chapter VI of Republic Act No. 9136, otherwise known as the 
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"Electric Power Industry Reform Act of 2001" or EPIRA, is hereby amended to read as 
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follows: 
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"SEC. 50. Purpose and Objective, Domicile and Term of Existence. - The 
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principal purpose of the PSALM Corp. is to manage the orderly sale, disposition, 
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and privatization of NPC generation assets, real estate, and other disposable 
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assets, and IPP contracts with the objective of liquidating all NPC financial 
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obligations and stranded contract costs in an optimal manner. 
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The PSALM Corp. shall have its principal office and place of business within 
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Metro Manila. 
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The PSALM Corp. shall exist [for a period of twenty five (25) years from the 
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effectivity of this Act] until June 26, 2076, unless otherwise provided by law, and 
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all assets held by it, all moneys and properties belonging to it, and all its liabilities 
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outstanding upon the expiration of its term of existence shall revert to and be 
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assumed by the National Government. " 
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SEC. 2.  Separability Clause. - If any part or section of this Act is declared 
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unconstitutional, such declaration shall not affect in any manner other parts or sections of this 
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Act. 
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SEC. 3.  Repealing Clause. - The provisions of Republic Act No, 9136, otherwise known 
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as the "Electric Power Industry Reform Act of 2001" shall continue to have full force and 
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effect, except insofar as they are inconsistent with this Act. 
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SEC. 4.  Effectivity Clause. - This Act shall take effect on the fifteenth day following its 
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publication in at least two (2) national papers of general circulation and in the Official 
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Gazette. 
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Approved, 
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