Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SIXTEENTH CONGRESS
rst Regular Session

HOUSE BILL NO.

4373

Introduced by Representatives Nicasio M. Aliping, Jr. and Ronald M. Cosalan

EXPLANATORY NOTE

The Benguet Electric Cooperative, Inc. (BENECO), whose franchise area covers
Baguio City and Benguet Province, vigorously pursued rural electrification starting in 2006
pursuant to its mandate as an electric cooperative. It obtained for this purpose a loan from the
National Electrification Administration (NEA) in the amount of Php100,000,000.00. The loan
was released in various amounts over a period of four years, the last release being in October
2009. It is payable in 15 years with an annual interest rate of 8.1%.

BENECO concentrated on energizing the entire province of Benguet, considering that
Baguio City at the time was fully energized. The loan of Php100M was thus utilized by
BENECO to provide electricity to 130 sitios in 12 municipalities of Benguet Province,
including sitios in far-flung areas,

In 2011, the present Administration gave priority to rural electrification due to the slow
pace of its implementation nationwide. The Sitio Electrification and Barangay Line
Enhancement Program (SEP-BLEP) was then implemented by the National Electrification
Administration (NEA) under NEA Memo No, 2011-019. A sizeable subsidy was allotted for
the program with the targeted result of energizing all sitios through the -BLEP by the year
2016.

Hence, electric cooperatives throughout the country were given subsidy coursed
through the NEA under the SEP-BLEP to fund sitio electrification undertaken in their
respective areas of operation. As it is, BENECO is the only electric cooperative that has taken,
out a loan from NEA to fund sitio electrification in its area of operation,


Out of its Php100M loan, BENECO has repaid Php22,868,166.00 of the principal and
has paid Php24,485,063 in interest. The outstanding balance stands at Php77,131,834.00. This
outstanding loan balance, unless condoned, will remain as an obligation of BENECO. It will
continue to be paid by BENECO’s members-consumers in Baguio City and Benguet Province.
‘As compared to the members-consumers of other electric cooperatives, they will shoulder
higher costs for electricity until the entire loan is repaid. And it is estimated that it will take
about 50 years for BENECO to recoup the expenditure it incurred for sitio electrification,

Equity therefore dictates that the thousands of BENECO’s members-consumers should
not be made to suffer this consequence. They should not continue to be penalized simply
because BENECO took the initiative of taking out a loan to embark on sitio electrification way
ahead of the government’s grant of subsidy for the purpose.

Itis therefore eamestly requested that this bill be approved.

arb Lon om ny

{ONALD M. COSAL, vd


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Constitution Hills, Quezon City

SIXTEENTH CONGRESS,
First Regular Session

4373

HOUSE BILL NO.

Introduced by Representatives Nicasio M. Aliping, Jr, and Ronald M. Cosalan

AN ACT

CONDONING THE UNPAID BALANCE OF THE LOAN, INCLUDING.
INTEREST AND PENALTIES THEREON, SECURED BY THE
B UET ELECTRIC COOPERATIVE, INC. (BENECO) IN 2006
FROM THE NATIONAL ELECTRIFICATION ADMINISTRATION
(NEA) AND USED BY BENECO ENTIRELY TO FUND THE
ELECTRIFICATION OF 130 SITIOS SITUATED WITHIN ITS AREA
OF COVERAGE

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

SECTION 1. Condonation of Loan. — The unpaid balance in the amount of Seventy-
Seven Million One Hundred Thirty-One Thousand Eight Hundred Thirty-Four Pesos
(Php77,131,834.00) of the loan secured by the Benguet Electric Cooperative, Inc. (BENECO)
in 2006 from the National Electrification Administration (NEA) and used by BENECO entirely
to fund the electrification of 130 sitios situated within its area of coverage, including interest
and penalties thereon, is hereby condoned and thereby forever release BENECO from the
payment thereof.

SEC. 2. Effectivity. ~ This Act shall take effect fifteen (15) days after its publication in
a newspaper of general circulation.

Approved,