Amending Executive Order No. 119 (S. 2002) And For Other Purposes

MALACAÑAN PALACE
MANILA

BY THE PRESIDENT OF THE PHILIPPINES

EXECUTIVE ORDER No. 460

AMENDING EXECUTIVE ORDER NO. 119 (S. 2002) AND FOR OTHER PURPOSES

WHEREAS, Republic Act No. 9136, otherwise known as the “Electric Power Industry Reform Act of 2001” (“EPIRA”) ordered all outstanding financial obligations of electric cooperatives to the National Electrification Administration (“NEA”) and other government agencies incurred for the purpose of financing the rural electrification program to be assumed by the PSALM Corporation;

WHEREAS, pursuant to R.A. No. 9136, Executive Order No. 119 was issued on 28 August 2002 to provide for restructuring program for electric cooperatives;

WHEREAS, this administration is committed to strengthening rural electric cooperatives in order to achieve reliable, secure and cheaper electricity for all consumers, particularly in rural areas, in line with the declared policies in EPIRA;

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order:

SECTION 1. Section 5 of Executive Order No. 119 (s. 2002) is hereby amended to...

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Summary of Executive Order No. 460

Amending Executive Order No. 119 (S. 2002) on the Restructuring Program for Electric Cooperatives

- Assumption of Rural Electrification Loans (Section 1)
• PSALM Corporation shall assume only Rural Electrification Loans incurred by electric cooperatives for financing the rural electrification program, as required by the Electric Power Industry Reform Act of 2001 (EPIRA).
• The assumption of Rural Electrification Loans by PSALM is subject to the following conditions (Section 5):
    • The Energy Regulatory Commission (ERC) shall have approved the reduction in the electric cooperative's rates commensurate with the resulting savings due to the removal of the amortization payments on the Rural Electrification Loan/s (Section 5c).
    • The loan condonation shall be effective on June 26, 2001, as provided for in EPIRA, and PSALM's assumption of the loans shall commence on the same date (Section 5).

- Payment of Assumed Rural Electrification Loans (Section 2)
• PSALM shall assume all Rural Electrification Loans upon the effectivity of EPIRA, retroactive to June 26, 2001 (Section 7).
• PSALM and the National Electrification Administration (NEA) or other creditor government agencies shall enter into contracts and agreements for the payment of the assumed Rural Electrification Loans through an amortization schedule (Section 7).
• The contracts and agreements may include mutual stipulations on the modification and/or amendments of existing contracts of mortgage and other security between electric cooperatives and NEA or other creditor government agencies (Section 7).

- Repealing Clause (Section 3)
• All executive issuances, orders, rules, and regulations or parts thereof inconsistent with the provisions of this Executive Order are hereby repealed or modified accordingly.

- Effectivity (Section 4)
• This Executive Order shall take effect immediately.