Republic of the Philippines ZGORE

House of Representatives /(%

Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

House Bill Number 4114

Introduced by Representative EDGARDO ‘ERM’ RAMA MASONGSONG

AN ACT
PROVIDING FOR THE CONDONATION OF LOAN, INCLUDING THE PRINCIPAL
AMOUNT, UNPAID INTERESTS AND PENALTIES, INCURRED BY THE BENGUET
ELECTRIC COOPERATIVE, INC. (BENECO) IN 2006 FROM THE NATIONAL
ELECTRIFICATION ADMINISTRATION (NEA), EXCLUSIVELY TO FUND ITS S/TIO
ELECTRIFICATION PROJECTS IN BENGUET

EXPLANATORY NOTE

In 2006, Benguet Electric Cooperative, Inc. (BENECO) received hundreds of
pending requests for electrification in several sitios of Benguet Province. These are far-
flung areas that have been left unenergized since the government declared to electrify all
areas in the country on July 28, 1969. Although, the electrification of these sitios was not
financially viable for BENECO to recoup its investment in a short time, the Cooperative
was determined to assist the people who have been left in the dark for decades. Due to
the limited government subsidy to fund rural electrification, BENECO then opted to apply
for a loan from the National Electrification Administration (NEA), which was approved in
the amount of one hundred million pesos (Php 100,000,000.00). The loan was released
in staggered amounts from December 28, 2006 to October 30, 2009, exclusively to
finance the electrification of 165 sitios in Benguet.

Quite notably, BENECO was the first and the sole electric cooperative in the
Philippines that took a loan for the purpose of funding its sitio electrification, regardless of
the financial and physical challenges it had to encounter in pursuit of its goal. The loan is
payable in fifteen (15) years with an annual interest rate of 8.1%. As of date, BENECO

1


has only paid the total of Php 47,357,229.00, which covers Php 24,489,063 in interest
and Php 22, 868,166 in principal

In 2014, about five (5) years after BENECO started to energize 165 sitios in
Benguet, President Benigno S. Aquino Ill has given priority to the vigorous
implementation of the rural electrification program. As his administration's social contract
with the people, President Aquino created Sitio Electrification Program and Barangay
Line Enhancement Program (SEP-BLEP) which included the provision of significant
subsidies to electric cooperatives through the NEA

Echoing the clamor of various local government units (LGUs) and member-
consumers in Benguet, it is now endeavored by the undersigned to mandate the NEA to
condone the loan of BENECO which was used to fund its sitio energization projects in
the various sitios in the province. It is incumbent upon us to recognize the efforts of
BENECO in complying with their mandate to facilitate and pursue rural and sitio
electrification pursuant to Republic Act No. 6038 and Presidential Decree No. 269. The
condonation of BENECO's loan will unburden thousands of electric consumers in
Benguet who are paying the remaining seventy-seven million pesos (Php 77 million)
payable to NEA. Hence, passage of this legislative measure will reward BENECO for
taking the initiative of pursuing electrification of the unviable areas for the benefit of the
people. More so, it will prevent any pass on burden to the consumers of the cost of the
electrification.

Therefore, | urge my dear colleagues for the immediate passage of this bill.

EDGARDO ‘ERM’ RAMA MASONGSONG


Republic of the Philippines

House of Representatives

Quezon City, Metro Manila

SIXTEENTH CONGRESS
First Regular Session

4114

House Bill Number

Introduced by Representative EDGARDO ‘ERM’ RAMA MASONGSONG

AN ACT
PROVIDING FOR THE CONDONATION OF LOAN, INCLUDING THE PRINCIPAL
AMOUNT, UNPAID INTERESTS AND PENALTIES, INCURRED BY THE BENGUET
ELECTRIC COOPERATIVE, INC. (BENECO) IN 2006 FROM THE NATIONAL
ELECTRIFICATION ADMINISTRATION (NEA), EXCLUSIVELY TO FUND ITS SITIO
ELECTRIFICATION PROJECTS IN BENGUET

Be it enacted by the Senate and the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Titfe. - This act shall be known as the “Benguet Electric Cooperative,
Inc. (BENECO) Loan Condonation Act of ___”. It shall hereinafter be referred to as the
Act.

SEC. 2. Declaration of Policy. — The State shall pursue a comprehensive rural
electrification, including the provision of electric services in sitios and remote households,
as a strategy to yield more opportunities for improved quality of life, greater access to
basic services and better infrastructure for rural development. To further accelerate
access to electricity services by the country’s un-electrified communities and strengthen
and integrate efforts on rural electrification, the State shall provide subsidies and grants
to the distribution utilities, particularly the electric cooperatives, pursuing sitio
electrification projects in their coverage area. In so doing, the State recognizes the effort
of Benguet Electric Cooperative, Inc. (BENECO), which has pursued rural and sitio
electrification in Benguet prior to the provision of subsidies, by declaring its incurred loan
for the purpose condoned.


SEC. 3. Condonation. - The remaining balance of loan incurred by the Benguet
Electric Cooperative, Inc. (BENECO) in 2006, which accrued and remains to be unpaid
up to the present, in whatever accumulated amount or sum of interest and/or penalties as
there may be, to finance its sitio electrification projects in its coverage area, payable and
due to the National Electrification Administration (NEA), pursuant to the Rural and Sitio
Electrification Program of the government, are hereby condoned, thereby perpetually
relieving BENECO from the payment thereof.

SEC. 4. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) newspapers of general circulation.

Approved,