ESTABLISHING THE INDUSTRY COMPETITIVENESS FUND (ICF) TO SUPPORT POWER-INTENSIVE INDUSTRIES

WHEREAS, it is a declared national policy to attract foreign
investment in the country to promote economic growth, generate
employment, upgrade technology and accelerate national development;

WHEREAS, the uncertainties in the global economic situation and the
volatility in the prices of electricity brought about by confluence of
factors have a ffected the operation of large industries particularly
those who generate substantial foreign exchange earnings, tax earnings
and employment for the country;

WHEREAS, the government recognizes the necessity to intervene in
order to maintain and encourage existing and potential investors with
substantial investment, income and employment provided by these large
industries, in a manner that will be beneficial to both the government
and investors;

WHEREAS, the establishment of an Industry Competitiveness Fund (ICF)
may not only keep existing investments but shall make the country more
attractive to foreign direct investments, thereby generating further
employment to boost exports, thereby enhancing the country’s economic
growth;

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. Establishment of the Industry Competitiveness Fund
– An Industry Competitiveness Fund (ICF) is hereby established to
support and incentivize qualified power-intensive industries which
contribute significantly to the economy by granting special power rates
based on the criteria and guidelines that will be developed for this
purpose. The ICF will be utilized to recover any financial impact that
PSALM/NPC, TRANSCO and PEZA have incurred in the grant of special power
rate through a reimbursement mechanism that will be developed by an
inter-agency committee created herein.

SECTION 2. Coverage of the Industry Competitiveness Fund (ICF)
– The ICF shall cover existing and future eligible preferred combined
generation, transmission and distribution rates granted by PSALM/NPC,
TRANSCO and PEZA in accordance with their respective policies, rules and
regulations, subject to the ICF criteria and guidelines developed for
this purpose.

SECTION 3. Creation of the Inter-Agency Committee on ICF –
An Inter-Agency Committee on ICF to be chaired by the Department of
Finance (DOF) and co-chaired by the Department of Energy (DOE) is hereby
created with the Department of Trade and Industry (DTI), Department of
Budget and Management (DBM), Philippine Economic Zone Authority (PEZA),
Power Sector Assets and Liabilities Management Corporation (PSALM),
National Power Corporation (NPC) and National Transmission Corporation-
Government (TRANSCO) as members.

SECTION 4. Responsibilities of the ICF Inter-Agency Committee – The Inter-Agency Committee shall have the following mandate:

1. Establish the criteria and guidelines for eligibility to the ICF including determination of the ICF entitlement

2. Identify responsibilities of each member agencies in the implementation of the ICF.

3. Create a Technical Working Group which will evaluate and
recommend applications for ICF entitlement for approval of the ICF
Inter-Agency Committee.

4. Develop the approval process for ICF applicants and/or
potential beneficiaries of the ICF which will be the basis of the TWG
for evaluation and recommendation.

SECTION 5. Source of Funds – An initial amount
of One Billion Six Hundred Million Pesos (Php 1,600,000,000.00) from the
government’s collections of the Value Added Tax is hereby allocated
for the initial beneficiaries of the ICF. The Inter-Agency Committee
shall identify fund sources to sustain the ICF Program.

SECTION 6. Role of the Departments, Bureaus, Offices, Agencies, Instrumentalities of the Government
– All heads of departments, bureaus, offices, agencies and
instrumentalities of the government are hereby directed to give full
support and assistance to PEZA, NPC, and TRANSCO in the implementation
of this Executive Order.

SECTION 7. Implementing Guidelines – the Inter-Agency
Committee on ICF shall promulgate the rules and regulations as may be
necessary to ensure the implementation of this Executive Order.

SECTION 8. Repealing Clause – All issuances, rules and regulations inconsistent herewith are deemed modified or repealed accordingly.

SECTION 9. Separability Clause – If for any reason, any
part or provision of this Order shall be held unconstitutional or
declared contrary to law, other parts or provisions hereof which are not
affected shall continue to be in full force and effect.

SECTION 10. Effectivity – This Executive Order shall take
effect fifteen (15) days after its publication in a national newspaper
of general circulation.

Adopted: 21 May 2009

(SGD.) GLORIA M. ARROYO
President of the Philippines  

BY THE PRESIDENT:

(SGD.) EDUARDO R. ERMITA
Executive Secretary