REPRES
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RECEIVED 7%)
Date 20 AUG 2005

Republic of the Philippines
House of Representatives
Quezon City

TWENTIETH CONGRESS

First Regular Session

3911

House Bill No.

Introduced by
APEC Party-List Representative Sergio C. Dagooc
PhilRECA Party-List Representative Presley C. De Jesus

EXPLANATORY NOTE

This bill seeks to provide for the condonation of the interests, surcharges,
penalties, and universal charges incurred by the Lanao del Sur Electric
Cooperative, Inc. (LASURECO) and the Maguindanao Electric Cooperative,
Inc. (MAGELCO), payable to the Power Sector Assets and Liabilities
Management Corporation (PSALM).

Accumulating since 2009 up to the present day, the obligations of these
cooperatives have reached unsustainable levels. For LASURECO, overdue
accounts payable for power bills amount to P13,016,189,561.31, of which
P5,876,028,036.45 represents accumulated interest alone. Within the
same period, LASURECO remitted a total of P95,962,509.15, which was
merely applied to interests, surcharges, and penalties.

Similarly, MAGELCO’s outstanding obligations for its power bills amount
to P3,083,682,725.93, with accumulated interest of P1,414,445.34.
MAGELCO has, however, paid P798,062,124.67 during the same span,
likewise absorbed only by interests, surcharges, and penalties.

Despite these payments, both cooperatives continue to face crippling
arrearages, making it impossible to settle the total amounts due. The
compounded financial burden has severely restricted LASURECO and


MAGELCO from delivering efficient and reliable service to the provinces of
Lanao del Sur and Maguindanao, respectively. The risk of supply
curtailment, coupled with the already difficult political, economic, and
social conditions in their service areas, further exacerbates the plight of
their member-consumer-owners.

Thus, this measure seeks to apply the total amounts already paid by
LASURECO and MAGELCO to their principal obligations, and that all
interests, surcharges, penalties, and universal charges accrued until the
effectivity of this Act be condoned.

Electric cooperatives in far-flung and distressed areas of Mindanao remain
steadfast in fulfilling their mandate to energize their communities despite
armed conflict, poverty, and underdevelopment. Their continued survival
and service to their constituents deserve recognition and support.

In view of the foregoing, the immediate passage of this bill is earnestly
sought.

. PRESLEY C. DE JESUS
*hilRECA Party-List

REP. SERGIO C. DAGOOC
APEC Party-List


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Republic of the Philippines
House of Representatives
Quezon City

TWENTIETH CONGRESS

First Regular Session

3911

House Bill No.

Introduced by
APEC Party-List Representative Sergio C. Dagooc
PhilRECA Party-List Representative Presley C. De Jesus

AN ACT
PROVIDING FOR THE CONDONATION OF UNPAID INTERESTS,
PENALTIES, SURCHARGES, AND UNREMITTED UNIVERSAL CHARGES
ON THE OVERDUE OBLIGATIONS OF THE LANAO DEL SUR ELECTRIC
COOPERATIVE, INC. AND THE MAGUINDANAO’ ELECTRIC
COOPERATIVE, INC. TO THE POWER SECTOR ASSETS AND LIABILITIES
MANAGEMENT CORPORATION

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

SECTION 1. All accumulated interests, surcharges, penalties, and
universal charges on the principal obligations incurred by the Lanao del Sur
Electric Cooperative, Inc. (LASURECO) and Maguindanao Electric
Cooperative, Inc. (MAGELCO) to the Power Sector Assets and Liabilities
Management (PSALM) Corporation, beginning from the year 2009 until the
effectivity of this Act, are hereby condoned, thereby perpetually relieving
LASURECO and MAGELCO from the payment of said interests, surcharges,
penalties, and universal charges. Moreover, the amount paid by LASURECO
in the sum of Ninety-five million nine hundred sixty-two thousand five

hundred nine pesos and fifteen centavos (P95,962,509.15), and MAGELCO,


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in the amount of Seven hundred ninety-eight million sixty-two thousand one
hundred twenty-four pesos and sixty-seven centavos (P798,062,124.67), of
such accumulated interests, surcharges, and penalties, shall be applied to
and deducted from the principal obligation of the two (2) electric cooperatives
(ECs).

SEC. 2. A one-time restructuring program is hereby authorized to be
adopted by the PSALM in favor of the LASURECO and MAGELCO over their
unpaid principal obligations: Provided, That once a staggered payment
scheme shall have been adopted between PSALM and the ECs on the principal
obligations, LASURECO and MAGELCO shall regularly submit to PSALM their

performance improvement programs and the status of their implementation.

SEC. 3. Within sixty (60) days from the effectivity of this Act, PSALM
shall, in coordination with the National Electrification Administration,
promulgate the necessary rules and regulations for the effective
implementation of this Act. Taking into account the legislative intent to
authorize the condonation of interests, surcharges, penalties and universal
charges and the one-time restructuring program, the said rules and
regulations shall not entail additional requirements that shall negate the
purpose of this Act: Provided, That subject to the ECs’ individual
circumstances, PSALM shall be empowered to determine the guidelines on
which ECs are eligible to request for condonation and shall further require
the EC to submit a Performance Improvement Plan to ensure payment
compliance: Provided further, That the failure of the PSALM to promulgate the
said rules and regulations shall not prevent the implementation of this Act

sixty (60) days after its effectivity.

SEC. 4. If any provision of this Act is declared unconstitutional or
invalid, the other parts or provisions hereof which are not affected thereby

shall continue to be in full force and effect.

SEC. 5. All laws, decrees, executive orders and issuances, rules and
regulations, or parts thereof inconsistent with the provisions of this Act are

hereby repealed or modified accordingly.


1 SEC. 6. This Act shall take effect fifteen (15) days after its publication
2 in the Official Gazette or in a newspaper of gencral circulation.

3 Approved,