Republic of the Philippines 
House of Representatives 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill Number ___________ 
__________________________________________________________________________ 
Introduced by: 
APEC Party-List Representative Sergio C. Dagooc 
PHILRECA Party-List Representative Presley C. De Jesus 
__________________________________________________________________________ 
AN ACT  
CREATING THE MINDANAO POWER CORPORATION AND 
 PROVIDING  FUNDS THEREFOR 
EXPLANATORY NOTE 
Republic Act No. 9136 or the Electric Power Reform Act (EPIRA) of 2001 
which liberalized and privatized the power industry was aimed to secure the 
power supply and reduce the cost of electricity through greater competition 
and efficiency. It was intended to free the government from subsidizing capital-
intensive power projects and allow instead the private sector to put up the 
same. Thus, the law directed the government to privatize or sell its power 
generation assets and the capacities it contracted with Independent Power 
Producers (IPPs). 
In Mindanao, National Power Corporation's (NPC) Agus and Pulangui 
hydroelectric power complexes, located in Lanao Del Sur and Bukidnon 
provinces, respectively, has been exempted from privatization and were given 
ten (10)-year reprieve from the passage of EPIRA; they continue to bring low 
power rates in Mindanao. 
The EPIRA provided that the ownership of the Agus and Pulangui power 
complexes was to be transferred to the Power Sector Assets and Liabilities 
Management Corp. (PSALM), the state agency which handles the privatization 
of National Power Corporation's (NPC) assets. They will continue to be, 
however, operated by the NPC. After the lapse of ten (10) years, the 
privatization of the Agus and Pulangui complexes is left to the discretion of 
PSALM, in consultation with Congress. 
September 7, 2022
3:45 pm
4544


It has been foreseen that the takeover by private sector groups or 
Independent Power Producers (IPP) of the Agus and Pulangui power complexes 
will increase the price of power in Mindanao as private investors are profit 
oriented and are propelled by business interests and profits, hence, an 
increase in the price of power is inevitable if they should acquire the power 
plants and take over its management and operations. Keeping the hydro plants 
in government will certainly moderate any price adjustments of power as the 
Pulangui and Agus plants will give a mix to the price of power that will keep it 
lower. 
The policy of the State to promote the economic development of the 
country, particularly the Mindanao region, and the availability of electricity at 
reasonable cost as a catalyst for economic growth and progress must be 
recognized. 
It is, therefore, imperative for the National Government to promote 
development in Mindanao by the establishment of the dependable and reliable 
supply of electric power through the acquisition of generation assets of PSALM 
located in Agus and Pulangui Hydropower Complexes by the direct 
stakeholders from the Mindanao region to assure that the electricity rates are 
reflective of the true cost of power. 
To attain these ends, it becomes necessary for an organized corporate 
entity in Mindanao to be created. And this is what this bill seeks to achieve. 
The proposed Mindanao Power Corporation, which is a standalone 
government-owned and controlled corporation, shall be empowered to acquire 
the Agus-Pulangui hydro complexes for its rehabilitation, operation, 
management, and maintenance. 
Acquisition by the Mindanao Power Corporation of the Agus-Pulangui 
Hydro Complexes would give beneficial resolution to the Mindanao 
stakeholders as it would potentially gain all the benefits derived from 
privatization, that is, effective and efficient administration of the power 
industry in the region; and security against the skyrocketing of electric power 
rates. 
Furthermore, the creation of Mindanao Power Corporation as an 
organized corporate entity in Mindanao is necessary to assure the full 
development and maximized utilization of the power resources of the region, 
ensure transparent and reasonable prices of electricity in a regime of free and 
fair competition, protect the public interest, and provide full public 
accountability to achieve greater operational and economic efficiency in 
Mindanao. 
The Passage of the bill is earnestly Sought. 
Rep. PRESLEY C. DE JESUS 
Rep. SERGIO C. DAGOOC 
PHILRECA Party-List 
APEC Party-List 


Republic of the Philippines 
House of Representatives 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill Number ___________ 
___________________________________________________________________________ 
Introduced by: 
APEC Party-List Representative Sergio C. Dagooc, and 
PHILRECA Party-List Presley C. De Jesus 
___________________________________________________________________________ 
AN ACT  
CREATING THE MINDANAO POWER CORPORATION AND 
 PROVIDING  FUNDS THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines 
1 
in Congress assembled: 
2 
SECTION 1. Short Title. — This Act shall be known as the "Charter of 
3 
the Mindanao Power Corporation. " 
4 
SECTION 2. Declaration of National Policy. — It is hereby declared 
5 
to be the policy of the State to promote the economic development of the 
6 
country, particularly in the Mindanao region, through effective and efficient 
7 
management of the power industry and the availability of electricity at 
8 
reasonable cost as a catalyst for economic growth and progress of the region. 
9 
Towards this end, the National Government must promote development 
10 
in Mindanao by the establishment of the dependable and reliable supply of 
11 
electric power through the acquisition of generation assets of PSALM located 
12 
in Agus and Pulangui Hydropower Complexes by the direct stakeholders from 
13 
the Mindanao region to assure that the electricity rates are reflective of the 
14 
true cost of power. 
15 
Accordingly, the creation of an organized corporate entity in Mindanao 
16 
is necessary to attain these ends. 
17 
4544


 
SECTION 3. Creation, Name, Domicile. — To carry out the above 
1 
policy, there is hereby created a body corporate to be known as the 
2 
Mindanao Power Corporation, hereinafter referred to as “the Corporation".  
3 
The principal office of the Corporation shall be determined by its Board 
4 
of Directors. It may also establish such offices, branches, agencies or 
5 
correspondents or other units in Mindanao or in other parts of the Philippines 
6 
as its business operations may require. 
7 
SECTION 4. Corporate Term. — The Corporation shall exist perpetually 
8 
subject to the conditions prescribed by Law. 
9 
SECTION 5. Corporate purpose and powers. — The Mindanao Power 
10 
Corporation, upon its organization, shall be a body corporate and shalt have 
11 
the following purposes and power: 
12 
a. To acquire the Agus- Pulangui Hydropower Complexes from the Power 
13 
Sector Assets and Liabilities Management (PSALM) on terms that is not 
14 
more onerous than Twenty-five (25%) initial down payment with 
15 
seventy-five (75%) to be amortized for Twenty-five (25) years. 
16 
b. To extend the benefits of the Agus-Pulangui Hydropower Complexes to 
17 
the greatest number of the population as possible, with preferential 
18 
right to benefit accorded to energy consumers and host communities 
19 
where such energy or water resources originate. 
20 
c. To undertake and implement faithfully such projects and operations as 
21 
will promote the total electrification of all provinces, cities, 
22 
municipalities, and barangays existing in the various regions of 
23 
Mindanao. 
24 
d. To exercise complete jurisdiction and control over watersheds 
25 
surrounding the reservoirs of the Agus-Pulangui Hydro complexes and 
26 
other plants and/or projects constructed or proposed to be constructed 
27 
by the Corporation The National Power Corporation (NAPOCOR) and the 
28 
PSALM shall, upon written advice by the Corporation, forthwith 
29 
surrender jurisdiction to the Corporation of all areas embraced within 
30 
the watersheds the NAPOCOR currently holds in Mindanao, subject to 
31 
existing private rights, the needs of waterworks systems, and the 
32 
requirements of domestic water supply. For new projects and upon 
33 
determination by the Corporation of the areas required for watersheds 
34 
for specific projects in Mindanao, the relevant government agencies, 
35 
institutions, and/or entities shall, upon written advice, surrender 
36 
jurisdiction to the Corporation of all areas embraced within the said 
37 


 
watershed, subject to existing private rights, the needs of waterworks 
1 
systems, and the requirements of domestic power supply; 
2 
e. To invest in the power industry, as well as, in any activity related to 
3 
energy resources development, and to set up or form business 
4 
subsidiaries under the Batas Pambansa Blg. 68, or through the 
5 
acquisition of the controlling interests of existing corporations which 
6 
may be necessary or contributory to the economic development of the 
7 
Mindanao region, or important in the public interest, or deemed 
8 
convenient or incidental to the carrying on of any of the purposes of the 
9 
Corporation, or which will promote the well-being of the Corporation; 
10 
f. To provide and maintain an adequate or increased supply at all times 
11 
of energy resources at competitive cost for electric consumers, 
12 
especially in Mindanao; 
13 
g. To foster conditions of power industry development conducive to a 
14 
balanced and sustainable growth of the economy; 
15 
Subject to government policy, the Corporation shall also have the 
16 
following purposes, powers, functions, rights and activities: 
17 
a. To have continuous succession under its corporate name until 
18 
otherwise provided by law; 
19 
b. To adopt a code of by-laws to complement this Act; 
20 
c. To adopt and use a corporate seal and alter the same, which shall be 
21 
judicially noticed; 
22 
d. To sue and to be sued in its corporate name; 
23 
e. To conduct investigations and surveys for the development of water 
24 
power in the Mindanao region; 
25 
f. To take water from any public stream, river, creek, lake, spring or 
26 
waterfall in the Philippines, for the purposes specified in this Act; to 
27 
intercept and divert the flow of waters from lands of riparian owners 
28 
and from persons owning or interested in waters which are or may be 
29 
necessary for said purposes, upon payment of just compensation 
30 
therefor; to alter, straighten, obstruct or increase the flow of water in 
31 
streams or water channels intersecting or connecting therewith or 
32 
contiguous to its works or any part thereof: Provided, That just 
33 
compensation shall be paid to any person or persons whose property 
34 
is, directly or indirectly, adversely affected or damaged thereby; 
35 


 
g. To operate, maintain, repair, rehabilitate, expand and/or improve the 
1 
Agus Pulangui Hydropower Complexes acquired from the Power 
2 
Sector Assets and Liabilities Management Corporation (PSALM) under 
3 
terms and conditions provided in this Act with authority to sell electric 
4 
power in bulk to electric cooperatives, distribution utilities, and other 
5 
entities in accordance with this Act. 
6 
h. To adopt measures necessary and desirable to ensure sufficiency of 
7 
power it committed to electric cooperatives and distribution utilities, 
8 
and to supply power in Mindanao in general including the expansion 
9 
of existing powerplants, establishment of new plants, and contracting 
10 
of ancillary or support services with other power generators; 
11 
i. To acquire by way of negotiation or in the exercise of the right of 
12 
eminent domain for the purpose of this Act in the manner provided by 
13 
law for instituting condemnation proceedings by the national, 
14 
provincial, city and municipal governments; 
15 
j. To promote, hold, transfer, sell, lease, rent, mortgage, encumber and 
16 
otherwise dispose of property incident to, or necessary, convenient or 
17 
proper to carry out the purposes for which the Corporation was 
18 
created; 
19 
k. Subject to Constitutional requirements and with mandate from the 
20 
President, the Corporation shall have authority to operate idle power 
21 
plants whether temporarily or permanently to prevent, control, avoid 
22 
or curb any imminent and actual power shortages; 
23 
l. To construct works across, or otherwise, any stream, watercourse, 
24 
canal, ditch, flume, street, avenue, highway or railway of private and 
25 
public ownership, as the location of said works may require: Provided, 
26 
That said works be constructed in such a manner as not to endanger 
27 
life or property: And provided, further, That the stream, watercourse, 
28 
canal ditch, flume, street, avenue, highway or railway so crossed or 
29 
intersected be restored as near as possible to their former state, or in 
30 
a manner not to impair unnecessarily their usefulness. Every person 
31 
or entity whose right of way or property is lawfully crossed or 
32 
intersected by said works shall not obstruct any such crossings or 
33 
intersection and shall grant the Board or its representative, the proper 
34 
authority for the execution of such work. The Corporation is hereby 
35 
given the right of way to locate, construct and maintain such works 
36 
over and throughout the lands owned by the Republic of the 
37 
Philippines or any of its branches and political subdivisions. The 
38 


 
Corporation or its representative may also enter upon private property 
1 
in the lawful performance or prosecution. of its business and 
2 
purposes, including the construction of the transmission lines 
3 
thereon: Provided, That the owner of such private property shall be 
4 
indemnified for any actual damage caused thereby: Provided, further, 
5 
That said action for damages is filed within five years after the rights 
6 
of way, transmission lines, substations, plants or other facilities shall 
7 
have been established: Provided, finally, That after the said period, no 
8 
suit shall be brought to question the said rights of way, transmission 
9 
lines, substations, plants or other facilities; 
10 
m. When essential to the proper administration of its corporate affairs or 
11 
necessary for the proper transaction of its business or to carry out the 
12 
purposes for which it was organized, to contract indebtedness and 
13 
issue 
bonds 
subject 
to 
approval 
of 
the 
President 
upon 
14 
recommendation of the Secretary of Finance; 
15 
To exercise such powers and do such things as may be reasonably 
16 
necessary to carry out the business and purposes for which it was 
17 
organized, or which, from time to time, may be declared by the Board 
18 
to be necessary, useful, incidental or auxiliary to accomplish the said 
19 
purpose; 
20 
n. To cooperate with, and to coordinate its operations with those of the 
21 
National Electrification Administration and public service entities; 
22 
o. In the prosecution and maintenance of its projects, the Corporation 
23 
shall adopt measures to prevent environmental pollution and promote 
24 
the conservation, development, and maximum utilization of natural 
25 
resources; and, 
26 
p. Generally, to exercise all the powers of a corporation under the 
27 
Corporation Law insofar as they are not inconsistent with the 
28 
provisions of this Act. 
29 
SECTION 6. Disposition of Hydroelectric Power. — The 
30 
Corporation shall have authority to sell the hydroelectricity pursuant to 
31 
the following parameters: 
32 
a. The existing capacity of the Agus-Pulangui Hydropower Complexes 
33 
shall be allocated pro-rata primarily to electric cooperatives and 
34 
distribution utilities, majority of whose customers are residential 
35 
ratepayers in Mindanao. However, Electric Cooperatives where the 
36 
Agus and Pulangui Hydropower Complexes are located or sourced shall 
37 


 
have the right of first or priority dispatch of up to 25% of the generated 
1 
capacities. 
2 
b. Consumers other than electric cooperatives and distribution utilities 
3 
may contract for direct supply of electricity that has been unsold or 
4 
uncommitted to Mindanao electric cooperatives and distribution 
5 
utilities. 
6 
c. If and when possible, the Corporation is allowed to participate in the 
7 
Wholesale Electric Spot Market (WESM) provided that any and all its 
8 
income shall be utilized solely for operating, maintaining, expanding 
9 
and improving the hydropower complexes and/or its other assets, and 
10 
as part of the Mindanao Power Fund, created under this Act. 
11 
Existing power supply agreements involving the Agus-Pulangui 
12 
Hydropower Complexes shall within a period of one year from the effectivity 
13 
of this Act, be reviewed and renegotiated to comply with the foregoing 
14 
parameters. Noncommitted power generated by the Agus-Pulangui Hydro 
15 
power complexes shall immediately be allocated to electric cooperatives and 
16 
distribution utilities that cater mainly to residential ratepayers. 
17 
SECTION 7. Mindanao Power Fund. — A Mindanao Power Fund is 
18 
hereby constituted which shall be taken from the rate fixed by the 
19 
Corporation and from royalties paid by electric power industry players for 
20 
energy resources in Mindanao. 
21 
The Mindanao Power Fund shall be administered by the Corporation 
22 
to improve the Mindanao power situation and to help avert any possible 
23 
power shortage: 
24 
a. By preventing idleness of power plants through: 
25 
i. 
Contracting electricity from readily available power plants in 
26 
Mindanao; provided, the price shall be the best available price 
27 
reasonably comparable to prices offered by similar plants in 
28 
Luzon and the Visayas; 
29 
ii. 
Operating idle power plants, whether owned by the private 
30 
sector or by government, but subject to constitutional and legal 
31 
requirements. 
32 
b. By contracting power plants that can generate electricity within thirty 
33 
(30) days; provided, the price shall be the best available price 
34 
reasonably comparable to prices offered by similar plants in Luzon and 
35 
the Visayas. 
36 


 
The Mindanao Power Fund shall be utilized to lower residential rates in 
1 
such manner as may be determined by the Corporation and as approved by 
2 
the ERC; provided it does not sacrifice energy security in the region. 
3 
SECTION 8. Rate-fixing. — The rates charged by the Corporation 
4 
shall be subject to approval by the Energy Regulatory Commission as 
5 
follows: 
6 
a. Rates shall allow the recovery of just and reasonable costs and a 
7 
reasonable return on the rate base (RORB) or other internationally 
8 
accepted methodology to enable the Corporation to operate viably. In 
9 
case the rate setting methodology used is RORB, it shall be subject to 
10 
the following guidelines: 
11 
i. 
For purposes of determining the rate base, the Corporation 
12 
may be allowed to revalue its eligible assets not more than once 
13 
every three (3) years by an independent appraisal company: 
14 
Provided, however, that ERC may give an exemption in case of 
15 
unusual devaluation: Provided, further, that the ERC shall 
16 
exert efforts to minimize price shocks order to protect the 
17 
consumers; 
18 
ii. 
Interest 
expenses 
are 
not 
allowable 
deductions 
from 
19 
permissible return on rate base; 
20 
iii. 
In determining eligible cost of services that will be passed on 
21 
to the end-users, the ERC shall establish minimum efficiency 
22 
performance standards for the Corporation including systems 
23 
losses, interruption frequency rates, and collection efficiency; 
24 
iv. 
Further, in determining rate base, the Corporation shall not 
25 
be allowed to include management inefficiencies like cost of 
26 
project delays not excused by force majeure, penalties and 
27 
related interest during construction applicable to these 
28 
unexcused delays; and 
29 
v. 
Any significant operating costs or project investments of the 
30 
Corporation which shall become part of the rate base shall be 
31 
subject to verification by the ERC to ensure that the 
32 
contracting and procurement of the equipment, assets and 
33 
services have been subjected to transparent and accepted 
34 
industry procurement and purchasing practices to protect the 
35 
public interest. 
36 
b. The rate shall ensure that the Corporation would be able to service the 
37 
acquisition cost of the Agus-Pulangui Hydropower Complexes; 
38 
c. The rate shall be sufficient for operating and maintenance expenses, 
39 
as well as capital expenditures projected to be necessary within the 
40 
next ten (10) years pursuant to a development plan; provided that 
41 
interest on loans and other debts shall not be included as expenses. 
42 


 
d. The rate allows for systems losses subject to the caps determined by 
1 
the ERC based on the load density, sales mix, cost of service, delivery 
2 
voltage and other technical considerations it may promulgate. 
3 
e. The rate shall include Thirty Centavos (Php 0.30) per kWh allocated to 
4 
the Mindanao Power Fund as created by this Act and administered by 
5 
the Corporation. 
6 
SECTION 9. Capital Stock of the Corporation. - The authorized 
7 
capital stock of the Corporation shall be Two Billion Pesos divided into Twenty 
8 
Million shares having a par value of hundred pesos each, which shares are 
9 
not to be transferred, negotiated, pledged, mortgaged, or otherwise given as 
10 
security for the payment of any obligation, unless approved by the ratepayers 
11 
in Mindanao in a plebiscite conducted for the purpose, with the help of the 
12 
Mindanao Electric Cooperatives. 
13 
SECTION 10. The Mindanao Power Board of Directors; Its 
14 
Composition; Compensation of Members; Qualifications; Powers and 
15 
Duties. - The corporate powers of the Corporation shall be vested in and 
16 
exercised by the Board of Directors, which shall be composed of seven (7) 
17 
members, consisting of a Chairman, Vice-Chairman and five (5) directors. 
18 
The Chairman and the five (5) directors shall be appointed by the President 
19 
of the Philippines.  
20 
The General Manager shall be chosen by majority vote of the Board of 
21 
Directors and shall act as the ex-officio Vice-Chairman of the Board. 
22 
At any time, there must be one (1) lawyer, one (1) Certified Public 
23 
Accountant, and one (1) Electrical Engineer sitting in the Board of the 
24 
Corporation. 
25 
The six (6) Directors of the Corporation, appointed by the President of 
26 
the Philippines shall be composed of the following representatives: 
27 
a. Two (2) Directors shall represent the Electric Cooperatives 
28 
b. One (1) Director shall represent private Distribution Utilities 
29 
c. One (1) Director shall represent the Mindanao consumer 
30 
/ratepayers  
31 
d. One (1) Director shall represent labor, and, 
32 
e. One (1) Director shall represent the business sector 
33 
The members of the Board shall each serve a term of three years, except 
34 
that any person appointed to fill a vacancy shall serve only for the unexpired 
35 
term of the member whom he succeeds. 
36 


 
Every member of the Board shall possess any one or a combination of 
1 
the following qualifications: A duly licensed professional of recognized 
2 
competence in engineering, in business management and finance, or in law, 
3 
particularly in the field of corporate practice, with at least ten years actual 
4 
and distinguished experience in their respective fields of expertise, and of 
5 
good moral character. In the case of the labor representative: a recognized 
6 
labor leader with sufficient training, particularly in labor management 
7 
relations, and of good moral character. 
8 
All appointees by the President of the Philippines shall be residents of 
9 
Mindanao. 
10 
The members of the said Board shall receive a per diem and allowances 
11 
for actual meetings attended or actual work done in such amounts as 
12 
generally practiced by other government-owned and controlled corporations. 
13 
Majority of the members of the Board shall constitute a quorum for the 
14 
transaction of the business of the Board. 
15 
SECTION 11. Powers and Functions of the Board. — The Board shall 
16 
have the following specific powers and duties: 
17 
a. To formulate and adopt policies and measures for the management 
18 
and operation of the Corporation; provided that policies and 
19 
measures for the management and operation of the Corporation, that 
20 
has any rate impact or otherwise affects the prices of electricity sold 
21 
to residential consumers shall be subject to approval by the ERC; 
22 
b. to adopt an annual and supplemental budget of receipts and 
23 
expenditures of the Corporation according to its requirements, which 
24 
may include financial assistance to Provinces, Cities/municipalities, 
25 
and/or Barangays which are the site of or contiguous to watersheds, 
26 
lakes or natural sources of hydroelectric power being utilized by the 
27 
Corporation, subject to the approval of the Energy Regulatory 
28 
Commission (ERC): Provided, that copies of the budgets or receipts 
29 
and expenditures herein referred to shall be disclosed to and shall 
30 
be subject of audit and verification by the ERC during rate fixing; 
31 
c. Subject to the provisions of existing laws and regulations and upon 
32 
the recommendation of the General Manager, to organize, reorganize 
33 
and determine the Corporation's staffing pattern and the number of 
34 
personnel, to fix their salaries and to define their powers and duties; 
35 
d. To appoint and fix the compensation of the General Manager, subject 
36 
to the approval of the President of the Philippines, and to appoint 
37 


 
and fix the compensation of the Assistant General Manager, regional 
1 
managers, and department chiefs; 
2 
e. For cause, to suspend, or remove, by a majority vote of all members, 
3 
the General Manager, with the approval of the President of the 
4 
Philippines, and the Assistant General Manager, regional managers 
5 
and department chiefs; and, 
6 
f. To adopt and set down guidelines for the employment of personnel 
7 
on the basis of merit, technical competence arid moral character. 
8 
SECTION 12. The General Manager; His Powers and Duties; 
9 
Regional Managers and Other Officers and Employees of the 
10 
Corporation. — The management of the Corporation shall be vested in the 
11 
General Manager, assisted by the Assistant General Manager, a department 
12 
chief for finance, a department chief for engineering and construction, a 
13 
department chief for administration, and such additional officers and 
14 
employees as the said Board may provide. For this purpose, the General 
15 
Manager shall have the following powers and duties: 
16 
a. 
To execute and administer the policies and measures approved by the 
17 
Board, and have the responsibility for the efficient discharge of management 
18 
functions; 
19 
b. 
To submit for the consideration of the Board such other policies and 
20 
measures which he deems necessary to carry out the purposes and 
21 
provisions of this Act; 
22 
c. 
To direct and supervise the operation and internal administration of the 
23 
Corporation and, for this purpose, may delegate some or any of his 
24 
administrative responsibilities and duties to other officers of the 
25 
Corporation; 
26 
d. 
To appoint and fix the number and compensation of subordinate 
27 
officials and employees of the Corporation; and, for cause, to remove, 
28 
suspend or otherwise discipline, any subordinate employee, subject to the 
29 
guidelines and policies set up by the Board, and with the further approval of 
30 
the same; 
31 
e. 
To prepare an annual report on the activities of the Corporation at the 
32 
close of each fiscal year and submit a copy thereof to the Board for 
33 
transmittal to the President of the Philippines, President of the Senate, and 
34 
Speaker of the House of Representatives, the Joint Congressional Power 
35 
Corporation (JCPC), and to the chairman of the committee concerned in the 
36 
Senate and in the House of Representatives: Provided That the Corporation 
37 


 
shall similarly submit to the respective chairman of the said committees of 
1 
Congress a report of its operations and financial statements within fifteen 
2 
(15) days from the end of every quarter: And provided, further, That said 
3 
committees, either motu proprio or upon the request of any of their 
4 
members, or of any Member of Congress, as the case may be, shall have the 
5 
authority to look into all the matters relative to the financial and business 
6 
operations and expenditures of the Corporation; 
7 
f. 
To exercise such other powers and duties as may be vested in him by 
8 
the Board from time to time. In the case of absence or disability of the 
9 
General Manager, the Assistant General Manager shall act in his place. 
10 
g. 
Under the supervision and control of the General Manager, relevant 
11 
officers of the Corporation shall take charge of the operations of the 
12 
Corporation as well as its power development program. 
13 
SECTION 13. Authority to Incur Indebtedness and Issue Bonds; 
14 
Their Conditions, Privileges and Exemptions, Sinking Funds; 
15 
Guarantee. 
16 
a. 
Domestic Indebtedness - Whenever the Board deems it necessary 
17 
for the Corporation to incur indebtedness or to issue bonds to carry out the 
18 
purpose for which the Corporation has been organized, it shall, by 
19 
resolution, declare and state the purpose for which the proposed debt is to 
20 
be incurred and the conditions of the bonds. In order that such resolution 
21 
be valid, it shall be passed by the affirmative vote of at least four members 
22 
of the Board and approved by the President of the Philippines upon 
23 
recommendation of the Secretary of Finance. 
24 
The bonds shall be issued under the following conditions: (1) they shall 
25 
be in registered form and transferable at the Office of the Treasurer of the 
26 
Philippines; (2) they shall not be sold at less than par; (3) they shall be 
27 
payable ten years or more from date of issue as may be determined by the 
28 
Secretary of Finance before their issuance but may be redeemable, at the 
29 
pleasure of the Board, after five years from such date _ of issue; (4) they shall 
30 
bear interest at an annual rate to be determined before their issuance by the 
31 
Secretary of Finance; (5) the interest maybe payable quarterly, semi-
32 
annually or annually as may be determined by the Secretary of Finance 
33 
before the issuance of the bonds; and (6) both principal and interest shall be 
34 
payable in legal tender of the Philippines. 
35 
The bonds issued under the authority of this subsection shall be 
36 
exempt from the payment of all taxes by the Republic of the Philippines, or 
37 
by any authority, branch, division or political subdivision thereof which facts 
38 


 
shall be stated upon the face of said bonds. Said bonds shall be receivable 
1 
as security in any transaction with the Government in which such security 
2 
is required. 
3 
A sinking fund shall be created, the total thereof at each annual due 
4 
date of the bonds shall be equal to an amount of annuity earning an annual 
5 
interest of nine-tenths of the rate of interest of the bonds as fixed by the 
6 
Secretary of Finance. The sinking fund shall be under the custody of the 
7 
Treasurer of the Philippines, who shall invest the same subject to the 
8 
approval of the Board and the Secretary of Finance. 
9 
The 
Republic 
of 
the 
Philippines 
or 
any 
of 
its 
agencies, 
10 
instrumentalities, organized for the purpose of issuing guarantees shall 
11 
guarantee the payment by the Corporation of both the principal and the 
12 
interest of the bonds issued by said Corporation by virtue of this Act, and 
13 
shall pay such principal and interest in case the Corporation fails to do so, 
14 
and there are hereby appropriated, out of the general funds in the National 
15 
Treasury not otherwise appropriated, the sums necessary to make the 
16 
payments guaranteed by this Act: Provided, That the sums so paid by the 
17 
Republic of the Philippines shall be refunded by the Corporation: Provided, 
18 
further, 
19 
That the Corporation shall set aside ten (10) per centum of its annual 
20 
net operating revenues before interests as a reserve or sinking fund to answer 
21 
for amounts advanced to it by the National Government for any loan, credit 
22 
and indebtedness contracted by the former for which the latter shall be held 
23 
answerable as primary obligor or guarantor under the provisions of this Act: 
24 
Provided, furthermore, That the setting aside of the amounts mentioned 
25 
herein shall automatically cease the moment the accumulated sinking fund 
26 
or reserve exceeds the amounts advanced to the Corporation by the National 
27 
Government under this Act: And, provided, finally, That the Corporation may 
28 
periodically make partial payments to the National Government out of the 
29 
said reserves. 
30 
The total principal indebtedness of the Corporation under this 
31 
subsection, exclusive of interest, shall not at any time exceed Ten (10) Billion 
32 
pesos. 
33 
b. 
Foreign Loans. - The Corporation is hereby authorized to contract 
34 
loans, credits, any convertible foreign currency or capital goods, and 
35 
indebtedness from time to time from foreign governments, or any 
36 
international financial institutions or fund sources the total outstanding 
37 
amount of which, exclusive of interests, shall not exceed One Billion United 
38 
States dollars or the equivalent thereof in other currencies, on such terms 
39 


 
and conditions as it shall deem appropriate for the accomplishment of its 
1 
purposes and to enter into and execute agreements and other documents 
2 
specifying such terms and conditions. 
3 
The President of the Philippines, by himself, or through the Secretary 
4 
of Finance or the Governor of the Central Bank, is hereby authorized to 
5 
negotiate and contract with foreign governments or any international 
6 
financial institutions, in the name and on behalf of the Corporation, one or 
7 
several loans, for the purpose of assisting in the reconstruction, or promoting 
8 
the development, of the economy of the country. 
9 
The President of the Philippines, by himself, or through the Secretary 
10 
of Finance or the Governor of the Central Bank, is hereby further authorized 
11 
to guarantee, absolutely and unconditionally, as primary obligor and not as 
12 
surety merely, in the name and on behalf of the Republic of the Philippines, 
13 
the payment of the loan or loans herein authorized as well as the 
14 
performance of all or any of the obligations undertaken by the Corporation 
15 
in the territory of the Republic of the Philippines pursuant to loan 
16 
agreements entered into with foreign governments or any international 
17 
financial institutions. 
18 
The negotiation and contracting of any loan, credit or indebtedness 
19 
under this subsection shall be subject to applicable laws. 
20 
The loans, credits and indebtedness contracted under this subsection 
21 
and the payment of the principal, interest and other charges thereon, as well 
22 
as the importation of machinery, equipment, materials and supplies by the 
23 
Corporation, paid from the proceeds of any loan, credit or indebtedness 
24 
incurred under this Act, shalt also be exempt from all taxes, fees, imposts, 
25 
other charges and restrictions, including import restrictions, by the Republic 
26 
of the Philippines, or any of its agencies and political subdivisions. 
27 
SECTION 14. Rehabilitation, Expansion, or Construction of the 
28 
Agus-Pulangui 
Hydropower 
Plant 
and 
other 
Power 
Projects 
29 
Recommended by the General Manager. — Upon determination by the 
30 
General Manager, on his own initiative or on recommendation by any 
31 
interested party, that the construction of any project by the Corporation is 
32 
advisable, a report to the Board, on the engineering and economic feasibility 
33 
of the project together with preliminary plans and estimates of the cost of the 
34 
proposed development and the estimated income to be derived therefrom 
35 
shall be submitted by the General Manager. 
36 
The Board may thereupon, at its discretion, designate a consulting 
37 
board composed of two competent and impartial engineers and one 
38 


 
competent economist to pass upon the different aspects of the project and 
1 
comment on the report of the General Manager. The Board shall, with the 
2 
said report and comment in view, decide whether or not the project shall be 
3 
constructed, and what changes, if any, shall be made in the scheme proposed 
4 
by the General Manager. 
5 
SECTION 15. Construction or Repair Work Awarded upon Public 
6 
Bidding; Exceptions. — All work of construction or repair of the 
7 
Corporation involving an estimated cost of One Million Pesos or more shall 
8 
be let by the General Manager, with the approval of the Board, to the 
9 
responsible bidder who made the lowest or most advantageous bid. Notice to 
10 
bidders shall be published as provided by law. In case no satisfactory bid is 
11 
received, the General Manager may proceed to advertise anew, or with the 
12 
approval of the Board, do the work by administration. Before award of 
13 
contract is made, the General Manager shall require the contractor to give 
14 
an adequate bond to secure the proper accomplishment of the work under 
15 
contract and to satisfy all obligations for materials used and labor employed 
16 
upon the same: Provided, That any repair, reconstruction or other work of 
17 
an emergency nature may be authorized by the Board to be undertaken by 
18 
administration or by contract: And, provided, further, That any single work 
19 
of construction or repair involving an estimated total cost of less than One 
20 
Million Pesos may, at the option of the General Manager, be authorized by 
21 
him to be undertaken by administration or by other advantageous means 
22 
after a canvass of the market to determine the lowest or most advantageous 
23 
price. 
24 
SECTION 16. Penalty for Destroying, Injuring, or Interfering with 
25 
any project of the Corporation, or maliciously Interfering with any 
26 
Person in the Discharge of his Duties Connected therewith. — Any 
27 
person or persons who shall maliciously destroy, injure, or interfere with any 
28 
canal, raceway, ditch, lock, pier, inlet, crib, bulkhead, dam, gate, sluice, 
29 
reservoir, aqueduct, conduit, pipes, culvert, post, abutment, conductor, 
30 
cable-wire, insulator, weir, benchmark, monument, or other works, 
31 
appliance, machinery, building or property of the Corporation, or who shall 
32 
maliciously do any act which shall injuriously affect the quantity or quality 
33 
of the water or electrical energy of the Corporation or the supply, 
34 
transmission, measurement, or regulation thereof, or who shall maliciously 
35 
interfere with any person engaged in the discharge of duties connected 
36 
therewith, or who shall maliciously prevent, obstruct and interfere with the 
37 
survey, works and the construction of access road and transmission lines or 
38 
any related works of the Corporation, shall be guilty of felony and punished 
39 
with a fine ranging from one to five thousand pesos or with imprisonment 
40 
ranging from one to five years, or both such fine and imprisonment, at the 
41 


 
discretion of the Court, and any injured party shall have the right to recover 
1 
all damages suffered and cost of suit in a separate civil action in any court 
2 
of competent jurisdiction. 
3 
SECTION 17. Appropriation of Public Waters. — Subject to existing 
4 
rights, all unappropriated public waters which may be used and developed 
5 
for hydraulic power purposes shall be granted to the Corporation: 
6 
Provided, that in case of conflict with the needs for domestic water 
7 
supply, the latter shall prevail. 
8 
SECTION 18. Non-profit Character of the Corporation; Exemption 
9 
from all Taxes, Duties, Fees, Imposts and other Charges by Government 
10 
and Governmental Instrumentalities. — The Corporation shall be non-
11 
profit and shall devote all its returns from its capital investment, as well as 
12 
excess revenues from its operation, for operating, maintaining, expanding, 
13 
and improving the hydropower complexes and/or its other assets, and as 
14 
part of the Mindanao Power Fund. It shall be subject to audit by the 
15 
Commission on Audit. 
16 
To enable the Corporation to pay its indebtedness and obligations and 
17 
in furtherance and effective implementation of the policy enunciated in 
18 
Section one of this Act, the Corporation is hereby declared exempt: 
19 
a. 
From the payment of all taxes, duties, fees, imposts, charges, 
20 
costs and service fees in any court or administrative proceedings in 
21 
which it may be a party, restrictions and duties to the Republic of the 
22 
Philippines, its provinces, cities, municipalities and other government 
23 
agencies and instrumentalities; 
24 
b. 
From all income taxes, franchise taxes and realty taxes to be paid 
25 
to the National Government, its provinces, cities, municipalities and 
26 
other government agencies and instrumentalities; 
27 
c. 
From all import duties, compensating taxes and advanced sales 
28 
tax, and wharfage fees on import of foreign goods required for its 
29 
operations and projects; and 
30 
d. 
From all taxes, duties, fees, imposts, and all other charges 
31 
imposed by the Republic of the Philippines, its provinces, cities, 
32 
municipalities and other government agencies and instrumentalities, 
33 
on all petroleum products used by the Corporation in the generation, 
34 
transmission, utilization, and sale of electric power. 
35 


 
SECTION 19. Separability Clause. — The provisions of this Act are 
1 
hereby declared to be separable, and in the event any one or more of such 
2 
provisions are held unconstitutional, they shall not affect the validity of other 
3 
provisions. 
4 
SECTION 20. Repealing Clause. — All laws, executive and 
5 
administrative orders, or parts thereof, inconsistent with any provision of 
6 
this Act are hereby repealed or modified accordingly." 
7 
SECTION 21. Effectivity Date. — This Act shall take effect fifteen (15) 
8 
days after its publication in a newspaper of general circulation. 
9 
APPROVED, 
10