GMA  OKAYS  GOVT  BAILOUT OF  P200-BILLION NAPOCOR DEBT

MANILA, October 19, 2004 (STAR) Napocor debt By Marichu Villanueva - Despite the threat of a fiscal crisis because of a burgeoning budget deficit, the government has assumed half of the P400-billion foreign and domestic debt of the state-run National Power Corp. (Napocor) on orders from President Arroyo.

Mrs. Arroyo approved the "direct assumption by the national government of a portion of financial obligations" of Napocor beginning Dec. 31 in compliance with the 2001 Electric Power Industry Reform Act (Epira).

Section 32 of the landmark power industry reform law, which was passed to facilitate the privatization of the debt-saddled Napocor, among other objectives, mandates the government to directly assume a portion of the financial obligations "in the amount not exceeding P200 billion."

Mrs. Arroyo issued Executive Order 370 last Oct. 12, a copy of which was obtained by The STAR, authorizing the Department of Finance to assume P200 billion of Napocorís debts.

"Obtaining the consent of Napocorís creditors would be facilitated by the direct assumption by the national government of P200 billion of Napocorís financial obligations as contemplated under section 32 of the Epira," Mrs. Arroyo stated in her order.

With that, Finance Secretary Juanita Amatong is now authorized to make the necessary steps in transferring half of Napocorís debts to the government.

Meanwhile, Sen. Manuel Roxas II sought yesterday a "full and public accounting" of the P200 billion assumed by the government. He wants to know how Napocorís financial standing deteriorated over the years.

"We cannot, in conscience, just consent to the national governmentís takeover of the P200 billion in financial obligations of Napocor, in the absence of a full and public accounting as how the liabilities came about, for what purpose or purposes the obligations were contracted, and how Napocor actually spent borrowed money," he told reporters. ó With Jose Rodel Clapano


Reported by: Sol Jose Vanzi

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