Section 32 of Republic Act No. 9136 (EPIRA) authorizes the National Government to directly assume a portion of NPC’s financial obligations, subject to the statutory limit.

Not to exceed Two Hundred Billion Pesos (₱200,000,000,000.00).

While Section 49 mandates transfer and assumption of NPC’s assets and outstanding liabilities by PSALM Corp., the Executive Order supports creditor consent by facilitating it through the Government’s direct assumption of a portion of NPC obligations under Section 32.

The Executive Order states that NPC’s creditors’ consent is required under various loan and financial agreements for the formal transfer of NPC’s assets and liabilities to PSALM Corp.

It is intended to facilitate obtaining creditor consent by reducing or addressing the portion of obligations that will otherwise be transferred to PSALM Corp.

Among others: (1) identification of specific debts to be assumed and annual absorption levels; (2) arrangements among PSALM Corp., NPC, and the National Government; (3) proper accounting/recording in the books of account of the National Government and NPC; and (4) implementation of the assumption.

The Executive Order authorizes the DOF to call upon the DBM, the Department of Energy, NEDA, and any other government agency as may be necessary.

They are enjoined to render full assistance and cooperation to the Secretary of Finance and to provide information/data required to carry out and implement the provisions of the Order.

The Secretary of Finance is authorized to enter into, conclude, and sign, for and on behalf of the National Government, agreements, deeds, and other documents necessary for valid and enforceable implementation.

Even if DOF determines the modality to give legal effect, the ultimate financial responsibility for payment of the assumed NPC obligations remains with the National Government.

Beginning on 31 December 2004.

The assumption is to be implemented in accordance with a schedule to be approved by the Development Budget Coordination Committee.

The Development Budget Coordination Committee under the NEDA Board.

It supports the DOF’s role in sound and efficient management of public resources, including review, approval, and management of all public sector debt to ensure proper utilization and prompt servicing.

It takes effect immediately after its publication in a newspaper of general circulation.