Govt. assumes NPC debt up to P200B

Section 32 of Republic Act No. 9136 (EPIRA) mandates that the National Government shall directly assume a portion of NPC financial obligations in an amount not to exceed PHP 200,000,000,000.00.
Section 49 of Republic Act No. 9136 (EPIRA) provides for the transfer and assumption by PSALM Corp. of NPC’s existing generation assets, real estate, other disposable assets, and outstanding liabilities arising from loans, bonds, securities, and other debt instruments.
The consent of NPC’s creditors is required for the formal transfer of NPC’s assets and liabilities to PSALM Corp.
Section 32 of EPIRA is used to justify direct assumption by the National Government in the amount not to exceed PHP 200,000,000,000.00 to facilitate creditor consent.
The order cites Executive Order No. 292 (Administrative Code of 1987), which makes the Department of Finance primarily responsible for the sound and efficient management of public sector financial resources and the review, approval, and management of public sector debt to ensure prompt servicing of obligations.

The order implements the EPIRA scheme by using direct assumption to address creditor-consent requirements for transfer to PSALM Corp.
The order provides a framework for the National Government’s financial assumption starting on December 31, 2004, aligned with the fiscal program determination by the Development Budget Coordination Committee under the NEDA Board.
The order directs that the assumption be carried out through financial management and accounting treatment handled by the responsible government agencies.

The National Government shall directly assume a portion of NPC financial obligations in an amount not to exceed PHP 200,000,000,000.00.
The direct assumption begins on December 31, 2004.
The direct assumption must follow a schedule to be approved by the Development Budget Coordination Committee.
The assumption is expressly anchored on Section 32 of Republic Act No. 9136.

The Department of Finance (DOF), in consultation with the Department of Budget and Management (DBM) and the Commission on Audit (COA), shall address and resolve issues relating to the assumption under Section 1.
The DOF’s responsibilities include identifying the specific debts to be assumed and determining the levels of annual debt absorption.
The DOF shall handle arrangements among PSALM Corp., NPC, and the National Government, including implementation mechanics of the assumption.
The DOF shall ensure the proper treatment and recording of the transactions in the books of account of the National Government and NPC.
The DOF shall oversee implementation of the assumption by the National Government of NPC financial obligations.
For assistance, the DOF may call upon the DBM, Department of Energy, NEDA, and any other government agency as necessary.
All heads of departments, agencies, bureaus, and offices, including government-owned or controlled corporations, must render full assistance and cooperation to the Secretary of Finance and must provide information and data required to carry out and implement 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 all other necessary documents to implement the assumption.
The Secretary of Finance’s authority covers documents needed to make the assumption valid and enforceable under the order.
For any NPC financial obligation directly assumed by the National Government, the DOF has full authority and discretion to determine the specific modality to give legal effect to the assumption.
The DOF may choose the modality so long as the ultimate financial responsibility for payment of the assumed NPC financial obligation rests with the National Government.

Executive Order No. 370 takes effect immediately after its publication in a newspaper of general circulation.