C O N T E N T S

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ACCOMPLISHMENT REPORT

MESSAGE OF THE CHAIRMAN

C O V E R S T O R Y

B R I D G I N G T H E P O W E R G A P

The 2013 National Power Corporation annual report shows the company’s active part in influencing and reshaping the country’s energy landscape through its focus on missionary electrification handled by the Small

Power Utilities Group. NPC continues to preserve the undisposed power assets, maintains and manages 11 watershed areas and 17 dams nationwide. Likewise, it manages the contract of 15 Independent Power

Producers (IPP) for and in behalf of PSALM. This mandate is part of the changing landscape of the Philippine Power Industry.

Entitled Bridging the Power Gap, the cover uses intersecting lines to represent NPC’s goal of energy interconnectivity among the country’s islands. Images of the company at work are placed in triangular frames to

highlight its importance to the Philippine energy industry.

N P C V i s i o nWith social progress as our ultimate goal, we shall be a partner in nation-building.

We shall electrify the country to its farthest communities and manage our assets to ensure their sustainability.

We commit to continuously improve ourselves to better serve the public.

All these for God and country.

N P C M I S S I O NWe play a vital role in the electric power industry. With our wealth of experience and technical expertise, we uplift the quality of life in the country and its islands.

We extend the same values of sustainability, reliability and safety to the management of power systems, dams and watershed areas.

This is our commitment to the Filipino people.

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MESSAGE OF THE CHAIRMAN

INDEPENDENT AUDITOR’S REPORT

OPERATIONAL HIGHLIGHTS

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N A T I O N A L P O W E R C O R P O R A T I O N

2Our Accomplishments in 2013

At the end of 2013, the Corporation posted a Net Income (NI) of P1.49 Billion, inclusive of the approved National Government subsidy to fund the 2013 capital outlay and the rehabilitation of facilities damaged by super typhoon “Yolanda”, all in the aggregate amount of P988 Million. This amount is net of the P83 Million reimbursement of NPC advances for the preservation and maintenance of the Bataan Nuclear Power Plant for the periods CY 2011 and CY 2012.

Even if the P988 Million National Government subsidy obtained in 2013 would be excluded to make an equal comparison with 2012, the resulting net amount would still be P505 Million which is better than the previous 2012 NI of P398 Million. The difference or increase of P107 Million was attributable to the combined positive impact of increase in revenue from the Universal Charge and the decrease in fuel cost and savings on manpower-related expenses due to privatization and other interventions.

In 2013, the total cash collections from the power customers reached P2.1 Billion. The overall average collection efficiency in Luzon, Visayas, and Mindanao outside the BASULTA areas (Basilan, Sulu, Tawi-tawi) was almost 97%, or 10% better than the previous year. On the other hand, overall collection efficiency, inclusive of BASULTA customers, rose by 7% from 42% in 2013. This was the outcome of a series of dialogues among NPC, the Department of Energy (DOE), other government agencies, BASULTA Electric Cooperatives, and local officials from both the local government units (LGUs) and the House of Representatives. The improved financial performance and cash collections had alleviated the sourcing of working funds for the efficient operation and upkeep of NPC plants. As NPC propels to move its mission forward, it is hopeful that it will continuously sustain its financial turn-around by efficiently executing the strategic agenda for growth thru effective management and reforms.

THE NATIONAL POWER CORPORATION, DESPITE THE CHALLENGES OF LIMITED FINANCIAL RESOURCES AND BORROWING AUTHORITY, HAD MANAGED TO SUSTAIN ITS POSITIVE FINANCIAL PERFORMANCE.

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LIGHTING UP THE ISLANDS

The Small Power Utilities Group or SPUG—the missionary electrification arm of NPC, currently manages 298 plants in 231 service areas in 207 municipalities across 35 provinces in the country. SPUG’s dependable capacity of 244 MW in 2013 serviced some 39 electric cooperatives and 10 LGUs. The Group provided power to 3,128 off-grid barangays which translates to some 755,862 households nationwide by year end.

Another significant development are the reforms in fuel management practices of SPUG that had ensured fuel supply to these facilities for the succeeding years. NPC revisited the fuel management manual for SPUG plants, gathering plant managers together for the first time in November, to respond to the unique peculiarities of these smaller plants and effectively address deficiencies in fuel delivery and management systems. These consultations have set the standard for a more integrative and participative approach to respond to the concerns of SPUG plants nationwide since.

Also in 2013, NPC was able to install a total of 15,104 kW of new and augmentation capacities in 12 different power plants and areas. These included: Ten (10) gensets with a total capacity of 6,000 kW were added to 4 existing power plants and two (2) barges.

1. BascoDPP 3 x 600 kW 1,800 kW 2. Casiguran 1 x 600 600 3. Lubang 1 x 600 600 4. Kalamansig 1 x 600 600 5. PB 109 1 x 600 600 6. PB 116 3 x 600 1,800 TOTAL 6,000

Three (3) new mini-grids in 3 different formerly un-electrified areas namely Atulayan in Camarines Sur, Caramoran in Palumbanes, Catanduanes, and Cabul-an in Bohol with a total capacity of 104 kW were installed.

Two (2) new rental gensets with a total capacity of 9,000 kW were put on line in 2 existing plants to replace the capacity of power barges 106 and 119 which were scheduled for dry docking. 1. San Jose, Occ. Min - 4,000 kW 2. Basilan 5,000 TOTAL 9,000

Capacity Addition In Existing Areas Of the 14 x 600 kW gensets programmed to be procured by NPC for various SPUG plants, a total of 10 units (6,000 kW) were already commissioned in 2013. In Luzon, 6 units (3,600 kW) were installed in Diesel Powered Plants (DPPs) in Basco in Batanes, Casiguran in Quezon, and Lubang, Mindoro Oriental, and Power Barge (PB) 109 docked in Tablas, Romblon. In Visayas, 5 units (3000 kW) were added to PB 116 stationed in Siquijor. Meanwhile in Mindanao, 1 x 600 kW was installed to Kalamansig DPP.

New Mini-Grids The construction of three (3) new mini-grids with an aggregate capacity of 104 kW was completed in November 2013. These new facilities are ready for commercial operations.

In Brgy. Toytoy, Palumbanes Island, Caramoran, Catanduanes, about 249 households are expected to benefit from its new 1 x 20 kW mini-grid plant in the area.

Construction of distribution lines and upgrading from single phase to three-phase distribution line for First Catanduanes Electric Cooperative is ongoing. While in Brgy. Atulayan, Sagñay, Camarines Sur, about 147 households stand to benefit from its new 1 x 22 kW mini-grid plant in the area. Construction of distribution lines for Atulayan DPP by Camarines Sur Electric Cooperative IV is likewise ongoing. (See Table 2)

Plant Name Location Capacity Installation Date Quantity kW LUZON Palumbanes DPP Catanduanes 1 22 November 2013Atulayan DPP Camarines Sur 1 22 November 2013VISAYAS Cabul-an DPP Bohol 1 60 November 2013Total 3 104

Table 2

In the Visayas, particularly in Barangay West Cabul-an, Cabul-an Island, Buenavista, Bohol, some 753 households are set to enjoy electricity for the first time with its new 1 x 60 kW mini-grid plant in the island. The installation of distribution lines was completed by Bohol Electric Cooperative II before year-end.

Rental of Gensets as Replacement for the Dry-docking of Power Barges The dependability and continuity of off-grid power supply rests much in the timely maintenance and upkeep of plants and power barges. Two (2) NPC Power Barges—PB 106 in Occidental Mindoro and PB 119 in Basilan have been scheduled for dry-docking works in the last quarter of the year. In lieu of these power barges, rented generating sets augmented the capacities of land-based plants in Occidental Mindoro and Basilan areas. (See Table 3)

PB 106 in San Jose, Occidental Mindoro has 4 x 3.6 MW units with a rated capacity of 14.4MW. Likewise, PB 119 in Basilan has a rated capacity of 7.2 MW, and a dependable capacity of 3.6 MW.

MILESTONES IN THE PRIVATIZATION OF SPUG OPERATIONS

Private Sector Participation Program On January 26, 2004, the DOE issued Department Circular No. 2004-01-001, “Prescribing the Rules and Procedures for Private Sector Participation in Existing NPC-SPUG Areas”. The DOE issued the Circular to serve as a set of guidelines and procedures to guide and encourage the private sector to participate in existing NPC-SPUG areas. The Circular took effect on February 12, 2004.

Plant Name Location Capacity Quantity/Rating Contracted (kW)LUZON San Jose S/S Occ. Mindoro 4 x 1,000 4,000MINDANAO Basilan DPP Basilan 4 x 1,500 5,000 Total 9,000

Table 3

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N A T I O N A L P O W E R C O R P O R A T I O N

As of December 31, 2013 eight (8) of the first 16 areas (14 First–Wave Areas plus Busuanga Island and Casiguran, Aurora) were opened for Private Sector Participation (PSP). These New Power Providers (NPPs) that were in commercial operation are located in the following areas; Oriental Mindoro, Mainland Palawan, Catanduanes, Bantayan Island, Masbate, Busuanga Island and Aurora Province.

Target commercial operation of Calamian Island Power Corporation (CIPC) power station in Busuanga (0.70 MW) and Coron (7.26 MW) was originally set for May 26, 2014. However, after Typhoon Yolanda’s massive disruption of power supply in the Visayas and Mindanao, CIPC and the Busuanga Island Electric Cooperative, Inc. (BISELCO) agreed to commission the Busuanga Power Station and declared early commercial operation on December 13, 2013. The commercial operation of the 7.26 MW Coron Power Station will commence on May 26, 2014.

In Aurora Province, Aurora Electric Cooperative (AURELCO) and the Eco Marketing Solutions Inc. (EMS) signed a Power Supply Agreement (PSA) for supply of electricity in Dinalungan, Casiguran, Dilasag, and Dinapigue (DiCaDiDi). EMS Biomass Power Plant has a capacity of .25 MW which was commissioned in May 2013.

The Tablas Island Electric Cooperative, Inc. (TIELCO) of Romblon and the Province of Siquijor Electric Cooperative, Inc. (PROSIELCO) of Siquijor, Siquijor were the latest Distribution Utilities (DUs) that conducted a Competitive Selection Process (CSP) for their respective NPPs. Activities for the takeover of SPUG’s generation function in these islands are in different stages of completion.

Also, the Palawan Electric Cooperative, Inc. (PALECO) started conducting CSP for the El Nido and Taytay areas but decided to put it on hold temporarily due to the rehabilitation of the damaged distribution lines due to Typhoon Yolanda. PALECO is expecting the privatization of the El Nido and Taytay areas by 2015.

The Marinduque Electric Cooperative, Inc. (MARELCO), Romblon Electric Cooperative, Inc. (ROMELCO), Tablas Island Electric Cooperative, Inc. (TIELCO) and Basilan Electric Cooperative, Inc. (BASELCO) conducted their respective Competitive Selection Process (CSP) sometime in 2006 to 2008 and PSAs were signed.

As of the end of 2013, only three areas remain without an initiative on the part of electric cooperatives to conduct CSPs for NPPs. These are Camotes in Cebu, and Tawi-Tawi, and Sulu in Mindanao.

For areas with outstanding CSP/NPP issues and areas with no interested private power providers, SPUG will continue to pursue its power development program. This is on top of supplying the electricity requirements of consumers delivered in the most efficient and reliable means possible.

Other SPUG-Related Developments: Status of Power Supply Agreements (PSAs) In total, SPUG has to execute 49 PSAs with various ECs/LGUs nationwide. As of the end of 2013, 44 PSAs or 90% have been accomplished. The remaining 5 PSAs (FICELCO, CAGELCO II, LGU-Calayan, BATELEC II, ROMELCO, CASURECO IV) or 10% of the total are in different stages of completion. The PSA with PROSIELCO was finally completed before the year ends.

RESOURCE MANAGEMENT SERVICES (RMS)

NPC’s Main Grid Generating Plants

The other undisposed generating assets of the Power Sector Assets and Liabilities Management (PSALM) Corporation, including the Angat Hydroelectric Power Plant (Angat HEPP) in Bulacan, Power Barge (PB) 101 to 103 in the Visayas, and PB 104 in Davao are being manned and operated by NPC personnel under the Resource Management Services (RMS) Functional Group.

Of these assets, Angat HEPP was bidded out as early as 2010 but turnover to the winning bidder, KWater Resources, Inc., was delayed due to legal issues raised in the Supreme Court. The Supreme Court validated the sale of the Angat HEPP to KWater Resources Inc. in October 2012 and PSALM is targeting the closing of said transaction by end of 2013. Meanwhile, Angat HEPP Management was able to secure its ISO 9001-2008 certification on July 12, 2013, which was awarded by Certification International Philippines, Inc. at the NPC Head Office.

On the other hand, PBs 101, 102 and 103 have been successfully bid out last 30 October 2013 but the transaction was put on hold as a result of the damage sustained by PB 103 during the onslaught of super typhoon “Yolanda” on November 8, 2013. Meanwhile, the re-bidding for PB 104 was scheduled by PSALM. NPC’s Independent Power Producer (IPP) Contracts NPC’s Independent Power Producer (IPP) Contracts, although transferred to PSALM by virtue of the EPIRA, are still being implemented and managed by NPC. This include contracts covering power plants which outputs have already been privatized by PSALM under the IPP Administration Agreements.

In relation to the Ilijan IPP Contract, NPC undertook a valve inspection on the 14.7 km long natural gas pipeline from Tabangao to Ilijan, Batangas during the scheduled Malampaya maintenance outage on November 9 to December 8, 2013, in preparation for the Pipe In-line Gauging or “Pigging” activity to be conducted in 2014. The valve inspection became possible with the valued assistance of the Malampaya Consortium who has a common interest with NPC of ensuring the natural gas pipeline’s safety and integrity.

NPC’s Mothballed and De-commissioned Plants NPC continuous to manage and preserve undisposed generating assets of NPC which are no longer in service including the Sucat Thermal Power Plant and the Gas Turbine Power Plants in Malaya and Bataan. Excluded assets still for disposal by PSALM at the Navotas, Talavera, Aplaya and General Santos sites continue to be the responsibility of NPC.

Meanwhile, maintenance and preservation activities at the mothballed Bataan Nuclear Power Plant are still being undertaken by NPC for and in behalf of the National Government after NPC Management worked for the restoration of the budget allocation to support the said activities.

WATERSHED MANAGEMENT Napocor also manages 11 watershed systems in the country as provided by the Sec. 6 (c), Rule 23 of Implementing Rules and Regulations of RA 9136 or the Electric Power Industry Reform Act of 2001. Watershed rehabilitation and protection have been the two (2) main core programs of the Watershed Management Department (WMD) primarily aimed at sustaining the production of resources particularly water and steam for power generation including contribution to biodiversity and climate change mitigation.

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For the year 2013, WMD strengthened activities on the rehabilitation and protection of watershed areas under its jurisdiction. Watershed rehabilitation which includes vegetative measures like reforestation, agroforestry, rubber, bamboo and tiger grass plantation remains the thrust of the WMD with the involvement of farmers as direct beneficiaries and laborers directly hired from the locality.

Structural control measures like riprap and rubble masonry were implemented in Buhi-Barit and San Roque Watersheds to immediately arrest soil erosion. WMD was able to rehabilitate a total of 498 hectares through reforestation, agroforestry and Non-Timber Forest Resource Management (i.e. bamboo, rubber, etc.). Out of the said total, 298 hectares has been established in partnership with public and private groups/institutions such as the Philippine Army, DENR (through the National Greening Project), San Roque Power Corporation (SRPC), Philex Mining Corporation (PMC), National Grid Corporation of the Philippines (NGCP), Tan-Villaranza Law Firm, among others.

Sustainable Partnership In Laguna, the Caliraya-Lumot Watershed Ecological Community (CLWEC) was revived after being dormant for 7 years. The organization is composed of LGUs, community stakeholders, civil society groups, and peoples’ organizations. The main objectives of the group are to protect the watershed, raise environmental awareness, and conduct re-greening programs.

Also, intensification of watershed protection and law enforcement has been undertaken in the watershed reservations nationwide under NPC management through the Bantay Gubat Patrol Program. Patrol operations including manning of checkpoints have been conducted jointly with other agencies like the DENR, PNP/military, LGUs and other groups together with the Bantay Watershed Task Force (BWTF) volunteers of NPC to ensure proper enforcement of forestry laws and regulation. A total of 10,746.64 board feet of lumber/timber, 195 sacks of wood charcoal, 6 conveyances have been confiscated by the said joint operations of NPC, PNP/AFP, DENR, the LGUs and the BWTF volunteers (with 780 individuals from the 11 watersheds).

Mobilizing the Youth Equally important activities like Information and Education Campaigns (IEC) and community development were also implemented for the improvement of the social and economic conditions of the people and to enhance public awareness on the importance of the watershed, its resources including their protection, management and development. This included the launching of the Batang Kalikasan-Young Environmental Champions (BK-YEC) Program aimed at fostering interest and awareness among students within the Caliraya-Lumot Watershed Reservation (CLWR) on environmental conservation and protection. The said program is envisioned to be replicated in other NPC-managed watersheds. Community Development Other accomplished community development activities include the dispersal of 150,000 seedlings (both forest and fruit bearing species) to various stakeholders, LGUs, academes, institutions and private organizations for their re-greening programs and dispersal of 527 gilts (swine) in the areas of Tiwi in Albay, Buhi in Camarines Norte and Bokod in Benguet and 3 heads of goat in Buhi, Camarines Sur. Animal dispersal is one of the activities of WMD aimed at uplifting the livelihood of local residents inside the watersheds.

DAMS MANAGEMENT

For 2013, the Dams Management Department (DMD) implemented activities in accordance with NPC Dam Safety Program (NPC-DSP) that mandates NPC to ensure the safe operations of all the seventeen (17) NPC operated and maintained large dams. The NPC-DSP provides the framework for managing safety throughout the lifespan of a dam. The primary purpose of the DSP is to ensure the safe operation of a dam so it can continue to function and that the downstream communities are protected against the consequences of possible dam failure.

DMD in cooperation with Dams, Reservoirs and Waterways Management Division (DRWMD) of MinGen undertook the 2013 updating of the existing NPC Dam Safety Program (NPC-DSP). The updates of NPC-DSP include recent development and standard practices in the international communities of dam ownership in terms of the primary concepts of structural safety, safety surveillance, operational safety, and emergency preparedness.

DMD undertakes the regular water level monitoring of major multi-purpose reservoirs, i.e. Angat, San Roque and Caliraya, including Ambuklao and Binga, as DMD’s function in reservoir water management, utilization, and flood forecasting.

DMD also conducted eleven (11) dam safety inspections and assessments, aimed at determining that the dams and their appurtenant structures are functioning properly as designed. It also ensures the early detection and correction of any developing problem and the associated risk, it may pose to the downstream areas.

DMD also completed the draft of the Emergency Action Plan (EAP) for Caliraya and Lumot Dams. The EAP is a document that guides response actions to a dam emergency conditions, these include the (1) Identification of emergency conditions; (2) Procedures to be followed by the operations personnel in response to emergency; (3) Emergency command structure; and (4) Notification process to emergency management agencies responsible for the protection of downstream communities

MINDANAO GENERATION

In 2013, the forecasted and actual generation for the whole of Mindanao was 9,060,859 MWh and 7,708,942 MWh, respectively. Inspite of this, NPC Mindanao Generation still provided 4,408,497 MWh or 57.11% contribution to the whole Mindanao Grid in 2013 as compared to 2012 which only accounted for 54.92% of the total energy generation mix. This is the combined total percentage contribution among the seven (7) hydroelectric power plants while the remaining 42.89% is from the diesel, geothermal and coal plants not controlled by NPC. The 2013 actual generation mix in Mindanao shows hydro power at 57% , diesel at 12% geothermal at 10% and 21% for coal plants.

The re-audit for the Integrated Management System of the Plant Complex was conducted successfully last February 4-5, 2013, by TUV –SUD Philippines. The Audit upheld the Certificate on Maintenance of Agus 6 and 7 HEPC for all the three (3) standards : ISO 9001(Quality), ISO 14001(Environment Management System), and OHSAS 18001 (Occupational Health and Safety Assessment).Likewise, Agus 4 & 5 HEPC, in pursuit to be at par with the rest of NPC generating plants, has developed and certified an Integrated Management System (IMS) for

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Operations and Maintenance of Power Generating Plants. It has successfully passed the surveillance audit on ISO 9001:2008, ISO 14000:2004 & BS OHAS 18000:2007 by an Internationally accredited third party Auditor TUV SUD PSR last June 13-14,2013.

In Pulangui HEP Complex, The Third Surveillance Audit for the Plants Integrated Management System (IMS) for ISO 9001: 2008 (Quality), ISO 140001 2009 (Environment Management System) and OHSAS 18001: 2007 (Occupational Health and Safety Assessment) conducted by a third party Certifying Body last October 10-11, 2013. The Plant was again recommended for maintenance of the three (3) ISO.

The long delayed Balo-i Flood Plain control Project in Lanao Del Norte reached a new peak when the LGU and its barangay officials endorsed the project favorably. The historic event was likewise highlighted with the signing of a Memorandum of Agreement between NPC, the Local Government Unit of Balo-i and the Department of Public Works and Highways. NPC also released P16.5 Million disaster assistance to Balo-i due to flood damages in 2008.

2013 NPC Corporate Social Responsibility (CSR) Program

The National Power Corporation responded early after Typhoon Yolanda battered Central Visayas particularly the Leyte-Samar area. Together with the Department of Energy (DOE), NPC deployed 173 units of 2-3 KVA generator sets to the provinces of Capiz, Iloilo, and the Samar-Leyte area. And because of the urgent need for potable water in devastated areas, NPC provided a water purification machine in Palo, Leyte where it was most in demand. Also 200 sacks of rice was donated by NPC to Tacloban City through the Office of the Provincial Governor of Leyte.

The fury of Yolanda likewise unmoored and swept ashore PB 103 causing an oil spill in Estancia Iloilo. Together with PSALM, NPC participated in the oil spill clean-up drive. The NPC President and her party also delivered PSALM’s 1.5 Million financial assistance to the Provincial Government of Iloilo and P500,000 to the LGU of Estancia.

In Mindanao, the Pulangui HEPC spent a whooping P18,274,875.00 for infrastructure projects like multi-purpose buildings, classrooms, acquisition of shredders and biocompactors, refrigerated meat van, ambulance and utility trucks and in the concreting of barangay roads.

These projects were charged to ER 1-94 funds of the Pulangui HEPC coursed through and approved by the Department of Energy. In Agus HEPC, P5,206,095.00 was spent for various community development projects chargeable to ER 1-94 fund. These projects included the purchase of mini dump trucks, paving of farm to market roads, solid waste management projects, improvement of water supply systems and purchase of ambulance. The communities and barangays around the Agus plant complexes were the beneficiaries of the NPC CSR of Mindanao Generation.

2014 TARGETS AND WORK PROGRAM

Capacity Generation ProjectsSummary A total of 14625 kW or 14.625 MW of additional capacity is programmed for 2014 for existing power plants of SPUG nationwide. Capacity addition projects will account for 100% of new capacities in 2014 as plants in New Areas (2 x 300 kW Pangutaran DPP in Sulu and 2 x

200 kW Languyan DPP in Tawi-Tawi) are not expected to commercially operate until early 2015. (See Table 5)

Capacity AdditionA.14 x 600 kW Project

While the first 10 x 600 kW units of this project were completed in 2013, the remaining: 1 x 600 kW genset for Sitangkai DPP in Tawi-Tawi is expected to be completed in the 1st quarter of 2014; and, 1 x 600 kW Siasi DPP in Sulu is expected to be completed within the 2nd quarter of 2014. (See Table 6)

B. 300 kW (and Below) Projects

These projects, which commenced in 2013, involves a total of 25 units of 50 kW, 75 kW, 100 kW and 300 kW gensets. Target completion of capacity addition in these areas is in the 3rd quarter of 2014.

Projects Capacity (kW) TargetsCapacity Addition A. 14 x 600 kW Project (remaining) 2400 1st and 2nd Quarter 2014

B. 300 kW (and Below) Project 4,425 3rd Quarter 2014

C. 10 x 600 kW Project 6,000 4th Quarter 2014

D. Additional Capacity for Marinawa DPP 3,000 4th Quarter 2014

15,825

Table 5

Plant Name Location Capacity Addition Completion of Installation Qty. kW Total MINDANAO Sitangkai DPP Tawi-Tawi 1 600 600 1st Quarter 2014Siasi DPP Sulu 1 600 600 2nd Quarter 2014Total 4 2,400

Table 6

Plant Name Location Capacity Addition Target Qty. kW Total LUZON

Itbayat DPP Batanes 2 100 200 3rd Quarter 2014

Sabtang DPP Batanes 2 100 200 3rd Quarter 2014

CamSur Mini Grid –Quinasalag Camarines Sur 2 50 100 3rd Quarter 2014

Camsur Mini Grid-Lahuy Camarines Sur 1 75 75 3rd Quarter 2014

Rapu-Rapu DPP Albay 2 300 600 3rd Quarter 2014

Batan DPP Albay 1 300 300 3rd Quarter 2014

Cagayancillo DPP Palawan 2 100 200 3rd Quarter 2014

J. P. Rizal DPP Palawan 1 300 300 3rd Quarter 2014

Limasawa DPP Leyte 1 300 300 3rd Quarter 2014

VISAYAS

Almagro Mini Grid-Biasong W. Samar 2 50 100 3rd Quarter 2014

Almagro Mini Grid-Lunang W. Samar 1 50 50 3rd Quarter 2014

MINDANAO

West Simunul DPP Tawi-Tawi 1 300 300 3rd Quarter 2014

Sibutu DPP Tawi-Tawi 2 300 600 3rd Quarter 2014

Manuk-Mankaw DPP Tawi-Tawi 1 100 100 3rd Quarter 2014

Pangutaran DPP Sulu 2 300 600 3rd Quarter 2014

Sacol DPP Zamboanga 1 100 100 3rd Quarter 2014

Tandubas DPP Tawi-Tawi 1 300 300 3rd Quarter 2014

Total 25 4,425

Table 7

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C. 10 x 600 kW Gensets

This project consisting of additional 10 units of 600 kW gensets for existing power plants in Luzon and Mindanao will commence early in 2014 and expected to be completed in the 4th quarter of the same year. (See Table 9)

D. Additional Capacity for Marinawa DPP

Marinawa DPP was granted with 3 x 1000 kW generating units which arexpected to be commissioned in the 4th quarter of 2014. Transmission Projects

Transmission Lines Activities involving a total of 128.23 km of transmission lines in Masbate, Palawan, and Occidental Mindoro have been programmed for 2014. (See Table 10)

2 0 1 3 A N N U A L R E P O R T2 0 1 3 A N N U A L R E P O R T

Strategic Interventions by the end of 2013

In furtherance of NPC’s agenda to sustain the efficiency of SPUG operations on to the next years, more interventions were programmed in 2013. These included an inventory of SPUG power plants in need of fuel oil storage tanks and flow meters to promote fuel efficiency.

Another concern of SPUG plants are the power outages and damage to gensets caused by transient faults along distribution lines. The challenge was to identify specific SPUG plants in need of automatic reclosers that protect plant engines from damage caused by sudden electrical trip, and alert SPUGs on possible serious line faults.

Also included in the final drawing board of 2013 is the re-fleeting of generating sets to replace older and inefficient units with new and more reliable ones. However, the re-fleeting of units is not only to replace the inefficient sets, but also includes the right sizing of capacity of gensets in power plants. -----xoxoxo---- National Power Corporation’s bid to sustain its winning streak has been evident in its performance for the year 2013. On the wings of a sustained financial performance, the organization remains a motive force in the power industry and the nation, as it continues to bring the proverbial dagitab—the spark of hope for a better life, through missionary electrification and oversight of power resources, in the communities it serves all over the country.

Plant Name Location Capacity Addition Target Qty. kW Total LUZON

El Nido DPP Palawan 1 600 600 4th Quarter 2014

Roxas DPP Palawan 2 600 1,200 4th Quarter 2014

Ticao DPP Masbate 2 600 1,200 4th Quarter 2014

MINDANAO

Dinagat DPP Dinagat Province 2 600 1,200 4th Quarter 2014

Kalamansig DPP Sultan Kudarat 2 600 1,200 4th Quarter 2014

Cag. De Tawi-Tawi DPP Tawi-Tawi 1 600 600 4th Quarter 2014

Total 10 6,000

Table 8

PROJECT NAME PROJECT LENGTH SCHEDULE Start Finish

1. Rehab of Mobo-Aroroy “3” 69 kV T/L Masbate 10.83 2013 2Q 2014

2. Rehab of Mobo-Aroroy “1” & “2” 69 kV T/L Masbate 32.59 2014 4Q 2014

3. Mobo-Cataingan “1” & “2” 69 kV T/L Masbate 76 2014 4Q 2014

4. Remaining works for Puerto Princesa-

Roxas 138 kV T/L (Re Rerouted T/L) Palawan 5 2014 Q 2014

5. 138 kV Steel Tower and Steel Pole for

Taguilan, Colonia and San Agustin River

Crossing in Occidental Mindoro Occidental

Mindoro 3.81 2014 3Q 2014

Total 128.23

Table 9

M A . G L A D Y S C R U Z - S T A . R I T AP R E S I D E N T & C E O

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N A T I O N A L P O W E R C O R P O R A T I O N

8

Message of the Chairman

NPC was able to increase power generation capacity by 15,104 kW this year. Likewise, transmission line and substation projects minimized system loss and made power supply more reliable, which helped allow for ISO re-certification of three NPC facilities for 2013. Moreover, NPC was able to significantly increase its collection efficiency in Luzon, Visayas and Eastern Mindanao from 85% to 96%. All in all, NPC sustained a net income of P505 million for the year 2013, which enabled the corporation to remit P100 million in dividends to the National Treasury again after six years of no remittances. This is a strong testament to the efficacy of courageous management reforms.

On top of its missionary efforts, NPC has always been keen to push for programs that satisfy its responsibility to the communities it affects. For 2013, 200 hectares of open and denuded areas in various watershed areas were restored, bringing the total area established under the Universal Charge-Environmental Charge (UC-EC) Fund to 3,070 hectares or 55.4% of the total target. Volunteers also augmented its work force for various community based watershed protection programs such as information, education and communication, and livelihood trainings. With a determined drive to push strategic transmission line projects, and a steady hand in managing its dams and watersheds to support power generation, NPC has provided the National Government a dependable partner, in our shared mission to catalyze development in the countryside. As NPC proceeds to another year in public service, may we continue to be the proverbial “dagitab” – the spark of light and hope to the people who, through your services, connect to the promise and potential of inclusive growth for all Filipinos.

Congratulations to the National Power Corporation!

Mabuhay!

C E S A R V . P U R I S I M AS E C R E T A R Y O F F I N A N C EC H A I R M A N , N A T I O N A L P O W E R B O A R D

THE YEAR 2013 WAS BOTH A CHALLENGING AND FRUITFUL YEAR FOR THE NATIONAL POWER CORPORATION (NPC). IN SPITE OF THE NUMEROUS DISASTERS THAT DEVASTATED THE ARCHIPELAGO IN 2013, NPC CONTINUES TO MOVE FORWARD IN ITS MISSION OF UPLIFTING THE QUALITY OF LIFE IN THE COUNTRY BY ELECTRIFYING THE FARTHEST COMMUNITIES.

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Outlook for 2014

An additional capacity of 15.825 MW is programmed and expected to be realized for the power plants of the Small Power Utilities Group (SPUG) nationwide, details of which are as follows:

PROJECT CAPACITY (KW) 1. 14 x 600 kW Project (remaining) 2,400 2. 300 kW (and below) Project 4,425 3. 10 x 600 kW Project 6,000 4. Additional Capacity for Marinawa DPP 3,000

The NPC, through the SPUG, has also programmed activities involving 128.23km of transmission lines in Luzon areas. These are located in Masbate, Palawan and Oriental Mindoro the longest of which is the Mobo-Cataingan 69 kV T/L with a length of 76 km.

In the Main Grid, NPC will continue to operate the undisposed generating assets of Power Sector Assets and Liabilities Management (PSALM) Corporation. These consist of the Pulangui and Agus complexes in Mindanao, Angat Hydroelectric Power Plant in Bulacan, Power Barge 104 in Davao, and Power Barges 101, 102 and 103 in Iloilo. Among these assets, the Angat Hydroelectric Power Plant has already been bidded out but the turn-over of the same to the winning bidder, K-Water Corporation, has not yet materialized pending resolution of legal matters. Likewise, the turn-over for Power Barges 101, 102 and 103 was also delayed after the Power Barge 103 suffered damages brought about the typhoon “Yolanda”.

The Independent Power Producers (IPP) contracts will still be implemented and managed by NPC including power plants whose outputs have already been privatized under the IPP Administration Agreements being implemented by PSALM.

The NPC will also continue to implement the rehabilitation and protection of watershed areas under its jurisdiction, and so with Dams Safety Program which also mandates NPC to ensure the safe operations of all the seventeen (17) NPC operated and maintained dams.

Moving forward in 2014, the vibrant and dynamic leadership of NPC Management is seen to steer Corporation towards a vigorous pursuit of its mandate on Missionary Electrification, Watershed and Dams Management and the preservation and management of PSALM’s undisposed generating assets.

C A R L O S - J E R I C H O L . P E T I L L AS E C R E T A R Y , D E P A R T M E N T O F E N E R G Y

2014 IS A YEAR OF CHALLENGE FOR THE NATIONAL POWER CORPORATION (NPC) AS IT HELPS RESHAPE THE ENERGY SERVICES THROUGH MISSIONARY ELECTRIFICATION AND THE STEWARDSHIP OF THE COUNTRY’S POWER GENERATING ASSETS.

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N A T I O N A L P O W E R C O R P O R A T I O N

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N A T I O N A L P O W E R C O R P O R A T I O N

ENERGY SALES IN THE MISSIONARY AREAS BY GRID & BY CUSTOMER TYPE (MWH) AS OF DECEMBER 2013

CY 2013

NPC NPP TOTALPHILIPPINES 399,846,204.35 399,846 442,288 842,134DISTRIBUTION UTILITIES 394,678,270.68 394,678 442,288 836,966GOVERNMENT/MISC. 3,254,649.99 3,255 - 3,255RESIDENTIAL 1,913,283.68 1,913 - 1,913LUZON 246,814,876.18 246,815 419,631 666,446DISTRIBUTION UTILITIES 242,164,967.29 242,165 419,631 661,796GOVERNMENT/MISC. 3,254,649.99 3,255 - 3,255RESIDENTIAL 1,395,258.90 1,395 - 1,395VISAYAS 31,567,793.68 31,568 20,812 52,379DISTRIBUTION UTILITIES 31,049,768.90 31,050 20,812 51,861GOVERNMENT/MISC. - - - -RESIDENTIAL 518,024.78 518 - 518MINDANAO 121,463,534.49 121,464 1,845 123,308DISTRIBUTION UTILITIES 121,463,534.49 121,464 1,845 123,308GOVERNMENT/MISC. - - - -RESIDENTIAL - - - -

ENERGY SALES CY 2013 NEW POWER PROVIDER ENERGY SALES ACTUAL GROSS (PhP) 1 Palawan Power Generation, Inc. 78,798,654.40 281,734,297.63 2 Delta P 62,296,864.00 333,108,680.33 3 DMCI Power 28,831,593.00 164,750,874.33 4 DMCI Masbate 73,096,408.00 651,596,051.26 5 ORMIN Power 43,297,716.00 173,127,839.80 6 Power One 29,595,426.00 138,581,850.32 7 Mindoro Grid Corp. 42,024,632.60 267,802,428.73 8 Bantayan Island Power Corp. (BIPCOR) 20,811,587.76 71,310,658.12 9 Catanduanes Power Generation Inc. (CPGI) 14,211,792.00 74,287,464.65 10 Calamian Island Power Corp (CIPC) - QUALIFIED THIRD PARTY 11 Power Source 2,410,211.55 40,636,426.79 SUB-T O T A L 395,374,885.31 2,196,936,571.96RENEWABLE ENERGY DEVELOPERS 12 Ecomarket Solutions, Inc. (EMS) ROMELCO 13 Cantingas Mini Hydro Power Corp 5,412,610.00 ROMELCO 14 Sunwest Water & Electric Co. (SUWECO) 14,094,001.00 FICELCO 15 Linao-Cawayan Mini-Hydro Power Plant 10,500,000.00 ORMECO 16 Dulangan Mini Hydro Power Plant 10,500,000.00 ORMECO 17 Kumalarang Mini Hydro 1,844,913.00 BASELCO SUB-T O T A L 42,351,524.00 18 Balongbong Mini Hydro Power Plant 4,561,124.00 FICELCO TOTAL 442,287,533.31

Operational Highlights

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MAIN GRID 2013 ENERGY SALES NO. OF CUSTOMERS TOTAL ENERGY SALES

LUZON 11 692,349,961.86 ECOZONE 4 327,227,438.00 INDUSTRIES 2 95,305,522.00 MISC./GOVERNMENT 2 180,056,992.46 POWER UTILITY 1 82,500,000.00 IPP 2 7,260,009.40 VISAYAS 37 2,133,260,562.61 COOPERATIVE 21 1,037,557,793.19 POWER UTILITY 4 994,142,690.24 INDUSTRIES 12 101,560,079.18 MINDANAO 54 7,239,038,252.64 COOPERATIVE 27 4,020,455,830.52 POWER UTILITY 4 2,709,697,439.94 INDUSTRIES 20 500,603,410.02 MISC./GOVERNMENT 3 8,281,572.16 PHILIPPINES COOPERATIVE 48 5,058,013,623.71 POWER UTILITY 9 3,786,340,130.18 ECOZONES 4 327,227,438.00 INDUSTRIES 34 697,469,011.20 MISC./GOVERNMENT 5 188,338,564.62 IPP 2 7,260,009.40 TOTAL 102 10,064,648,777.11

ENERGY SALES IN THE MISSIONARY AREAS (BY GRID)

VISAYAS6.22%

MINDANAO14.64%

NPC + NPP = 842,134 MWH

LUZON79.14%

ENERGY SALES IN THE MISSIONARY AREAS (BY CUSTOMER TYPE)

GOVT/MISC. 0.39 %

RESIDENTIAL 0.23 %

DISTRIBUTION UTILITY 99.39 %

NPC + NPP = 842,134 MWH

TOTAL ENERGY SALES IN THE MAIN GRID (BY GRID)

MINDANAO 71.93%

LUZON 6.88%

VISAYAS 21.20%

TOTAL 10,064,649 MWH

TOTAL ENERGY SALES IN THE MAIN GRID (BY CUSTOMER TYPE)

COOPERATIVE 50.26%

POWER UTILITY 37.62%

ECOZONES 3.25%

INDUSTRIES 6.93%MISC./GOVT 1.87%

IPP 0.07%

TOTAL 10,064,649 MWH

SUMMARY OF NO. OF CUSTOMERS IN THE MAIN GRIDAS OF DECEMBER 2013

MINDANAO 54

(53%)

VISAYAS 37 (36%)

LUZON 11 (11%)

N A T I O N A L P O W E R C O R P O R A T I O N

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Independent Auditor’s Report

The Board of DirectorsNational Power CorporationDiliman, Quezon City

Report on the Financial Statements

We have audited the accompanying financial statements of the National Power Corporation, which comprise the statement of financial position as at December 31, 2013, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with state accounting principles generally accepted in the Philippines, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Basis for Qualified Opinion

The existence and valuation of the year-end account balance of Utility Plants totaling P6.798 billion could not be ascertained due to non-appraisal of Utility Plants and failure to conduct physical inventory.

The existence, validity and accuracy of “OMA Trust” account with year-end balance of P7.291 billion were not ascertained due to: a) non-reconciliation with the “Assets Held in Trust with NPC” account of P4.170 billion, the reciprocal account maintained by PSALM for fund transfers for the operation and maintenance of the generation and other assets under the Operation and Management Agreement (OMA) between PSALM and NPC, registering a variance of P3.121 billion; b) non-conduct of physical inventory for supplies, materials and equipment located at the Independent Power Producers (IPPs) and Power Barges 101, 102 and 103 with an aggregate amount of P2.909 billion; and c) for the items inventoried, existence of a variance of P1.344 billion between the balance per books and the balance per count.

Retained PSALM and Retained TransCo accounts set up by NPC for accounts retained by the latter during asset-debt accounts transfer from NPC and separation of TransCo books from NPC both in 2008, with aggregate year-end balances of P3.621 billion for asset accounts and P41.250 billion for liability accounts, remained outstanding/dormant since CY 2009; and documents to support the same were not available for verification, hence, the validity and accuracy of the accounts’ balances were not ascertained.

The existence, validity and correctness of Construction Work-in Progress account balance as at year-end amounting to P1.219 billion were not ascertained due to the inclusion of Work orders totaling to P716.313 million which remained dormant since CY 2010; and completed projects in the amount of P37.098 million.

The accuracy, completeness and validity of Power Customers Receivables account balance of P6.733 billion as at year-end could not be ascertained as NPC’s Due from Other Agency account balance of P3.832 billion did not reconcile with the reciprocal account maintained by PSALM for Universal Charge for Missionary Electrification (UCME) collections, under Due to NPC account balance with a balance of P2.359 billion, registering a variance of P1.473 billion. The collectability of 29% of the account balance or P1.960 billion is doubtful as these remained outstanding for more than two to ten years.

Qualified Opinion

In our opinion, except for the effects and the possible effects of the matters discussed in the Basis for Qualified Opinion paragraphs, the financial statements present fairly, in all material respects, the financial position of the National Power Corporation as at December 31, 2013, and of its financial performance and cash flows for the year then ended in accordance with state accounting principles generally accepted in the Philippines.

Emphasis of Matter

We draw attention to Note 32 of the Notes to Financial Statements which describes the uncertainty pertaining to the NPC-Drivers and Mechanics Association (NPC-DAMA) case filed against the Corporation which may cost approximately P41 billion. Our opinion is not qualified in respect of this matter.

Supplementary Information Required Under Revenue Regulation No. 15-2010

Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The supplementary information required by the Bureau of Internal Revenue on taxes, duties and license fees disclosed in Note 36 to the financial statements is presented for purposes of additional analysis and is not a required part of the financial statements prepared in accordance with state accounting principles generally accepted in the Philippines. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

COMMISSION ON AUDIT

MINERVA T. CABIGTINGSupervising Auditor

June 24, 2014

Republic of the PhilippinesCOMMISSION ON AUDIT

Commonwealth Avenue, Quezon City, Philippines

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Statement of Financial Position

Notes 2013 2012

ASSETSNon-Current AssetsUtility plant - net 4 6,798,300,860 7,307,468,169

Construction work in progress 5 1,218,736,907 1,176,375,346

Non-utility property - net 6 133,226,250 171,932,791

Non - current power receivables 7 1,917,595,152 269,662,335

Deferred charges 0 0

Other Assets 8 5,411,983 5,126,128

Total Non-Current Assets 10,073,271,152 8,930,564,769

Current AssetsCash & cash equivalents 9 5,515,344,341 4,323,340,492

Power receivables - net 10 6,733,149,696 8,235,478,037

Other receivables - net 11 5,247,145,425 3,753,995,555

Materials and supplies for operation 12 1,089,331,543 1,265,910,703

Advances, prepayments and deposits 13 63,541,254 31,565,210

Total Current Assets 18,648,512,259 17,610,289,997

Trust Assets (PSALM) 14 7,290,555,250 7,487,710,988

Temporary Registry 15 3,621,194,498 5,250,448,114

TOTAL ASSETS 39,633,533,159 39,279,013,868

EQUITY AND LIABILITIESEquity 22,615,102,247 21,242,743,191

Non-Current Liabilities

Long-term debts (net of current portion) 18 852,017,974 806,504,596

Provision for vacation and sick leave benefits 21 571,030,542 625,061,839

Deferred Credits 19 143,107,645 7,302,632

Total Non-Current Liabilities 1,566,156,161 1,438,869,068

Current Liabilities

Accounts payable and accrued expense 19 4,372,958,839 3,724,016,543

Current portion of long-term debts 18 47,458,721 42,553,272

Retention on contract payments 20 88,200,820 68,716,095

Deposits and trust funds 22 31,450,797 23,409,090

Interest payable 18/28 455,826 547,507

Total Current Liabilities 4,540,525,003 3,859,242,508

Trust Liabilities (PSALM) 14 7,290,555,250 7,487,710,988

Temporary Registry 15 3,621,194,498 5,250,448,114

TOTAL EQUITY and LIABILITIES 39,633,533,159 39,279,013,868

See accompanying Notes to Financial Statements.

December 31, 2013(With Comparative Figures as at December 31, 2012)

(In Philippine Peso)

N A T I O N A L P O W E R C O R P O R A T I O N

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Statement ofComprehensiveIncome

Notes 2013 2012

OPERATING REVENUEUtility income 2,175,735,664 2,319,922,691

Transmission services income 12,380,079 18,720,224

Universal charge 21 7,443,873,876 7,135,343,428

Total operating revenue 9,631,989,619 9,473,986,343

Prompt payment discount (25,144,661) (34,816,303)

Other demand energy adjustment income (59,838,251) (63,381,267)

Net Operating Revenue 9,547,006,707 9,375,788,773

OPERATING EXPENSESGeneration 5,706,713,190 6,364,801,605

Administrative and general expenses 684,452,728 896,188,195

Depreciation and depletion 326,243,550 403,916,555

Bad debts 297,469,211 246,693,549

Transmission and distribution 29,033,646 24,161,013

Other operating expenses 83,940,508 115,287,939

Total Operating Expenses 7,127,852,833 8,051,048,856

OPERATING INCOME (LOSS) 2,419,153,874 1,324,739,917

OTHER INCOME(EXPENSES)Interest income 464,827,846 480,320,424

Income from admininstrative fee 26 6,401,339 68,517,701

Gain on forex fluctuation 0 36,927,507

Gain on debt service - ICERA/forex recovery 0 1,712,069

Gain on diesel/fuel transfer 41,229 443,631

Gain Retirement of Assets 11,741,071 0

Miscellaneous income 27 50,813,399 101,483,071

Subsidy to NPP’s of MEA 29 (2,200,745,985) (1,479,289,940)

Depreciation - other plants/property (117,833,737) (77,739,051)

Interest expense 28 (17,111,986) (32,121,826)

Finance & other bank charges (74,537) (450,383)

Loss CERA collection (forex) recovery 24 (2,606,190) 0

Loss on forex fluctuation 25 (93,809,001) 0

Miscellaneous expenses 30 (15,721,266) (26,963,562)

Other Income (Expenses) (1,914,077,818) (927,160,359)

NET INCOME (LOSS) Before NG Subsidy 505,076,056 397,579,558

National Government Subsidy 31 987,761,000 0

NET INCOME (LOSS) Before Income Tax 1,492,837,056 397,579,558

Income Tax 0 0

NET INCOME (LOSS) 1,492,837,056 397,579,558

See accompanying Notes to Financial Statements.

For the Year Ended December 31, 2013(With Comparative Figures as at December 31, 2012)(In Philippine Peso)

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Statement of Changes in Equity

Notes 2013 2012

CAPITAL STOCK P100 par value

Authorized 500,000,000 shares, issued 270,488,708 27,048,870,789 27,048,870,789

DONATED CAPITAL

Balance, Beginning 2,822,788 4,157,956

Donation during the year 16 650,710 0

Amortization (421,632) (1,335,168)

Balance, End 3,051,866 2,822,788

RETAINED EARNINGS 17

Balance, Beginning (8,031,337,130) (15,628,654,879)

Appropriated Retained Earnings - Sinking Fund 66,236,996 0

Net income (loss) during the year 1,492,837,056 397,579,558

Correction of prior year’s income (186,859,576) 7,199,738,191

Balance, End (6,659,122,654) (8,031,337,130)

APPRAISAL CAPITAL

Balance,Beginning 2,222,386,744 2,222,386,744

Adjustments (84,498) 0

Balance, End 2,222,302,246 2,222,386,744

EQUITY 22,615,102,247 21,242,743,191

See accompanying Notes to Financial Statements.

For the Year Ended December 31, 2013(With Comparative Figures as at December 31, 2012)

(In Philippine Peso)

N A T I O N A L P O W E R C O R P O R A T I O N

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Statement ofCash Flows

Notes 2013 2012

CASH FLOWS FROM OPERATING ACTIVITIES

Cash collected from Universal Levy 7,018,907,839 6,993,905,083

Collections of other receivables 308,822,083 3,923,327,775

Collections from power customers 2,079,571,825 2,549,698,590

Collections on deposits & advances 590,334 0

Amount withheld from employees, suppliers & other creditors 766,959,471 998,278,083

Interest and dividends received 337,743,750 289,729,754

Deposits and trust funds received 17,955,494 17,835,564

Net fund remittance 21,149,737 0

Subsidy from the National Government - -

Purchase of fuel for generation (3,808,478,536) (5,862,781,283)

Statutory remittances (1,738,407,890) (2,192,023,128)

Other operating expenses (2,115,578,738) (1,554,699,967)

Other expenses (1,171,535,714) (1,194,305,122)

Personnel cost (449,496,306) (452,295,542)

Refund of deposits and trust funds (9,191,156) (58,608,295)

Net funds transferred/paid to/for PSALM/OMA* 0 (23,295,038)

Realty tax paid (560,043) (476,274)

Share of local government units in the national wealth 0 (318,293)

Deposits and other advances 0 (7,531)

Purchased power cost - -

Net Cash Provided by/(Used in) Operating Activities 1,258,452,150 3,433,964,376

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received from investments 44,013,676 69,417,238

Proceeds from sale of assets 13,023,416 57,678

Capital expenditures (60,219,091) (89,723,327)

Net Cash Used in Investing Activities (3,181,999) (20,248,411)

CASH FLOWS FROM FINANCING ACTIVITIES

Transfer from restricted cash account 0 65,000,000

Transfer to restricted cash account (66,271) (197,046)

Interest paid on loans (17,203,667) (38,637,036)

Loss on forex (debt service) (2,606,190) 0

Payment of loans (43,390,174) (2,341,851,211)

Net Cash Used in Financing Activities (63,266,302) (2,315,685,293)

EFFECT OF EXCHANGE RATE ON CASH & CASH EQUIVALENTS 0 (24,885)

NET INCREASE IN CASH & CASH EQUIVALENTS 1,192,003,849 1,098,005,787

CASH & CASH EQUIVALENTS, BEGINNING OF THE YEAR 4,323,340,492 3,225,334,705

CASH & CASH EQUIVALENTS, END OF YEAR 5,515,344,341 4,323,340,492

See accompanying Notes to Financial Statements.

For the Year Ended December 31, 2013(With Comparative Figures as at December 31, 2012)(In Philippine Peso)

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1. CORPORATE INFORMATION

National Power Corporation (NPC) was created Public Corporation under Commonwealth Act No. 120 on November 3, 1936. Its charter was then revised by virtue of Republic Act 6395, as amended.

Primary Function - Section 1 of its Charter provides that the Corporation will undertake the following: (1) the comprehensive development, utilization and conservation of Philippine water resources for all beneficial uses, including power generation; and (2) total electrification of the Philippines through the development of power from all sources to meet the needs of industrial development and dispersal and the needs of rural electrification.

NPC’s Charter provides that it shall be non-profit and shall devote all its returns from its capital investment, as well as excess revenues from its operation, for expansion. To enable the Corporation to pay its indebtedness and obligations and, in furtherance and effective implementation of the government’s policy of power generation, the Corporation, including its subsidiaries, is declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersede as bonds, in any court or administrative proceedings.

With the enactment of RA#9337, otherwise known as the Reformed Value-Added Tax (RVAT) Law of 2005, which took effect on November 1, 2005, NPC’s purchases of fuel and purchased power as well as its sale of electricity are subjected to VAT, specifically stated under Sec. 24(A) of R.A. 9337 repealing Section 13 of R.A. No. 6395 on the Corporation’s exemption from VAT. However, its non-profit character and exemption from all other taxes, including income tax, has not been affected. Moreover, the Bureau of Internal Revenue (BIR) in its Ruling 018-2000 dated January 20, 2000 categorically stated that pursuant to Section 32(B) (7) (b) of the National Internal Revenue Code (NIRC) as amended by RA 8424, the income of NPC from its operation as public utility or from the exercise of any essential governmental functions shall be exempt from corporate income tax.

The EPIRA

Republic Act No. 9136, otherwise known as the “Electric Power Industry Reform Act of 2001”, the “EPIRA”, was enacted to institute reforms and provide framework for the restructuring of the electric power industry including, among others, the privatization of generation assets, real estate, other disposable assets, independent power plants and the liquidation of all liabilities and stranded contract cost of NPC.

The EPIRA organized the industry into four (4) sectors: generation, transmission, distribution and supply. The structural reforms resulted, among others, in the creation of two (2) Government Owned and Controlled Corporations (GOCC’s), the National Transmission Corporation (TRANSCO) and the Power Sector Assets and Liabilities Management Corporation (PSALM). NPC was retained as a GOCC to perform the missionary electrification function, through the Small Power Utilities Group (SPUG), watershed management and the operation and maintenance of all undisposed generation assets.

Separation of TRANSCO Books from NPC and the Transfer of Assets and Liabilities from NPC to PSALM

As mandated under the EPIRA and pursuant to the instructions from the respective Boards and Managements of NPC, PSALM and TRANSCO, the actual separation of books of TRANSCO from NPC and the assets-debt accounts transfer from NPC to PSALM was implemented on

October 1, 2008 based on the balances of interim financial report (except for SPUG) as of September 30, 2008. Full implementation was effected on December 31, 2008. This momentous event significantly affected the current financial structure of NPC, as only the accounts pertaining to SPUG, watershed and other assets/facilities that are used and useful in the performance of its missionary function, watershed management and the operation of plants, under the Operation and Maintenance Agreement with PSALM, are retained in the books of NPC. Similar in 2008, NPC reported only the result of operation for SPUG and the financial condition of the residual NPC, consisting of accounts pertaining to SPUG & watershed and the retained PSALM/TRANSCO accounts which are reported in the balance sheet under the Temporary Registry Accounts. (See Note 15)

Operation and Maintenance Agreement (OMA)

The Operation and Maintenance Agreement (OMA) is an agreement entered into by and between NPC and PSALM on February 17, 2009 wherein NPC will act as the Operator of the transferred generation and other assets/facilities owned by PSALM prior to privatization of such assets. This agreement shall be effective until the second anniversary unless otherwise extended or renewed by the parties. For 2013, PSALM and NPC agreed to continue to observe the terms of the current OMA until the new OMA is executed and made effective by both parties.

The head office is located at the National Power Corporation, Building 1, BIR Road, corner Quezon Avenue, Diliman, Quezon City.

2. MAJOR ACCOMPLISHMENTS

Following are the highlights of accomplishments of SPUG and Watershed in 2013:

SPUG and WATERHED

FINANCIAL HIGHLIGHTS

• Revenue

NPC raised a revenue of P9,547 million for CY 2013 which is higher by 1.83% or P171 million over its actual revenue of P9,376 million in CY 2012.

• Net Operating Income

NPC posted a Net Operating Income P2,419 million which is higher by 82.61% from its Net Operating Income of P1,325 million in CY 2012.

• Net Income

NPC reported a Net Income of P1,493 million fr om its Net Income of P398 million in CY 2012. The significant increase is attributed primarily from NG subsidy amounting to a net of P 988 million reported as Miscellaneous income and revenue derived from Universal Charge for Missionary Electrification of about P9,547 million over the actual revenue level of P9,376 in CY 2012 or an increase of 1.83% or P171 million.

OPERATIONAL HIGHLIGHTS

In furtherance of its mandate to bring power as catalyst for development to the farthest, smallest and remotest areas and islands, the following are NPC’s programs and projects accomplishments in 2013:

Small Power Utilities Group (SPUG)

PROJECT/ACTIVITY ACCOMPLISHMENTSupply, Delivery, Installation, Test and Commissioning 14 x 600 kW Generating Sets for Various SPUG Areas(Contract No. BCS-SU-2013-001)

Commissioned 10 x 600 kW Generating Sets

Supply of Materials, Labor, Delivery, Erection/Installation, test and Commissioning of Mini-Grid System for the Electrification of 2 Barangays at Cabul-an, Buenavista, Bohol under Off-Grid Electrification Project (Contract No. BCS-IN-2013-005)

Commissioned 1 x 6o kW Generating Sets

Contruction of Power Facilities Including Suppy, Erection/Installation and Test of Balance-of-Plant in Brgy. Toytoy, Palumbanes Island, Caramoran, Catanduanes under the Off-Grid Electrification Project (Contract No. BCS-IN-2013-003)

Commissioned 1 x 20 kW Generating Set

Supply of Materials, Labor, Delivery, Erection/Installation, Test and Commissioning of Mini-Grid System for the Electrification of Brgy. Atulayan Island, Sagnay, Camarines Sur under the Off-Grid Electrification Project. (Contract No. BCS-IN-2013-004)

Commissioned 1 x 15 kW Generating Set.

Mobo-Aroroy “3”69 kV T/L Rehabilitaion Project

Construction Status: 60.34% Completed

Genset Rental Contracted Capacity:1st Quarter - 50.90 MW2nd Quarter - 47.90 MW3rd Quarter - 51.90 MW4th Quarter * 51.90 MW

SPUG Plants Operating Hours Increase in daily operating hours:1. Casiguran DPP – 4 Hrs. (from 20 – 24 hrs.)2. Concepcion DPP – 4 Hrs. (from 8 – 12 hrs.)3. Corcuera DPP – 4 Hrs. (from 8 – 12 hrs.)

WATERSHED

Watershed Rehabilitation

• Established a total area of 200 hectares of open and denuded areas in various watershed areas through reforestation, agroforestry and non-timber forest resources management As of December 2013, a total of 2,808 hectares were already established under Universal Charge – Environmental Charge (UC – EC) fund.

• Tree planting activities in partnership with various groups were also undertaken in 2013 such as with the NGCP, Philex Mining Corporation, San Roque Power Corporation, PNP/AFP/Npc Ladies Foundation, among others. A total of 297 hectares of open areas were rehabilitated in addition to the UC-EC funded projects.

• In support to the various rehabilitation projects and other environmental commitments of local groups to plant trees, the Department has embarked on the propagation of seedlings. More than 250,000 seedlings of various forestry species and fruit trees were produced/propagated for the rehabilitation projects, landholdings development and greening projects in partnership with other groups.

Watershed Protection

• Watershed protection and law enforcement through the “Bantay Gubat Patrol Program” has been launched in CY 2013 in the various watersheds under the NPC jurisdiction. Patrol operations including manning of checkpoints have been conducted jointly with other agencies like the DENR, PNP/military, LGUs and other groups together with the Bantay Watershed Task Force (BWTF) volunteers of NPC to ensure proper enforcement of forestry laws and regulation.

• A total of 10,746.64 board feet of lumber/timber, 195 sacks of wood charcoal, 6 conveyances have been confiscated by the joint operations of NPC, PNP/AFP, DENR, the LGUs and the BWTF volunteers (with 780 individuals from the 11 watersheds).

Notes to Financial Statements

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Corporate Social Responsibility Program

• Dispersal of around 150,000 seedlings (both forestry species and fruit trees) to various stakeholders, LGUs, academes and institutions and private organizations for their re-greening programs.

• Dispersal of 527 gilts in the areas of Tiwi, Albay, Buhi (Camarines Sur) and Bokod, (Benguet) and 3 heads of goat in Buhi, Camarines Sur. Animal dispersal is one of the activities of the Department aimed at uplifting the livelihood of local residents inside the watersheds.

Information Dissemination Campaign (IEC)

• Continuous implementation of Information, Education and Communication (IEC) activities are being undertaken by the Department such as TV and radio plugging and production and distribution of print materials such as poster, leaflets, flyers, brochures, calendars and billboards Twenty (20) school lectures/film showing and 3,000 print materials conducted and produced.

• Last October 2013, the Batang Kalikasan – Young Environmental Champion (BK-YEC) Program was launched. Thirty two (32) students from the elementary and high schools in Caliraya-Lumot Watershed Reservation

Status of NPC Projects under Power Engineering Services (PES)As of 31 December 2013

Project Title REMARKS

A. PROJECT IMPLEMENTATION GROUP - CLUSTER A1. Re-reeling of 336.6 MCV ACSR Incl. Supply of 145

Steels Reels• Re-reeling Completed: 14 July 2013. • Contractor’s Final Billing already paid.

2. Codon-Virac 69kV T/L Project

a. ROW

- Controllable -There are 67 Controllable PAP’s/- On-going Payment of Lot Owners

- Uncontrollable - On-going documentation/processing of documents for filing of expropriation case for five (5) lot owners.

b. Supply, Delivery and Construction of T/L • Bid Opening scheduled on 31 October 2013 was postponed. To resume upon approval of Virac (Marinawa) S/S Site.

3. Mobo-Aroroy 69KV T/L Rehabilitation Project

a. ROW

- Schedule I & II ROW activities completed.

- Schedule III - On-going ROW activities- Remaining PAP’s are comsidered uncontrollable.

Construction

- Schedule I & II • Bid Opening conducted last 16 October 2013. • Bid Evaluation Report approved by BAC on 21 November 2013. • For finalization of the Post Qualification Report.

- Schedule III • On-going implementation. • Contractor’s request for Time Extension on 07 November 2013 is under evaluation. Required documentary attachments not yet complied by the Contractor.

4. Mobo-Cataingan 69KV T/L Project (Schedule I & II)

a. ROW - On-going ROW activities

Supply and Delivery of T/L Matl’s/Inst. • Bid Opening conducted last 29 October 2013. • For preparation of Post Qualification Report.

5. Remaining Works for Puerto Princesa – Roxas 138 KV T/L

• Whole length of the transmission line is almost complete but cannot be energized due to uncompleted portions in Schedule I & II due to issues on ROW. • Tender Documents for the remaining works of the Puerto Princesa-Roxas 138 kV T/L Project already finalized. • Remaining works of the Puerto Princesa-Roxas 138 kV T/L Project for bidding process upon concurrence of the Hagedorns to the proposed re-routing scheme.

B. PROJECT IMPLEMENTATION GROUP - CLUSTER B6. Sta. Cruz-San Jose “4” 69 kV T/L Project, Schedule

II

Construction • Energized on 29 August 2011. Turned-over to End-user. • Final Billing on-hold pending settlement of Contractor’s claim issue with its Sub-Contractor.

7. Supply/Delivery, Installation, Test and Commissioning of Gensets for Various SPUG Areas, 14X600 KW

• On-going implementation. • Contractor’s request for Contract Time Extension on 18 November 2013 is under evaluation. Pending conformance to the required documentary attachments. • Remaining activities are Testing and Commissioning.

C. PROJECT IMPLEMENTATION GROUP - CLUSTER C8. Construction of Agus 6/7 HEP Multi-Purpose

Building• Project Completed on 21 February 2013. • Certificate of Final Completion already approved.

9. Concreting of Access Road at Agus 4 HEP Right Wing Dam

• On-going implementation. • Project is substantially completed as of 30 December 2013. • Target completion - 07 January 2014.

10. Restoration/Reconstruction of Mindanao Generation Building

• On-going implementation. • Target completion - 11 July 2014.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Preparation

The accompanying financial statements of NPC are prepared and presented in accordance with the accounting principles and standards presently accepted in the Philippines under the historical cost basis, except for property, plant and equipment, which are carried in the balance sheet at revalued amounts.

Pursuant to the provisions on the Scope and Authority, paragraph 7 of the Preface to Philippine Financial Reporting Standards, PFRS are designed to apply to the general purpose financial statements and other financial reporting of all profit-oriented entities. Hence, NPC, being a GOCC of non-profit character, may not be subject to the full compliance with the same, in its strict sense. Nevertheless, the following PFRS/Philippine Accounting Standards (PAS), as appropriate, were adopted and made the basis, in the preparation of the Financial Statements in order to achieve the primary objective of fairly presenting the Corporation’s financial condition, results of operation and cash flow, in so far as practicable and consistent with the standards and principles consistently applied pursuant to the former SFAS/IAS, which are now governed by PFRS/PAS.

(CLWR) participated in the said program aimed at fostering interest and awareness to students within the CLWR on environmental conservation and protection.

Community Development and Extension

• Conduct of various livelihood training to communities supporting and helping NPC in its endeavor of forest protection A total of 11 livelihood trainings/seminars conducted:

• Provision of technical assistance in the implementation of livelihood projects:o Ubi Production in Pantabangan-Carranglan Watershedo Pangasius Catfish Production in Matampay, Lanao del Suro Abaca Fiber and Water Lily Handicraft Making in Lake Lanao - Aguso Water Hyacinth Handicraft Production (with shredder) in Brgy. Tubigon,

Maramag, Bukidnono Tilapia Culture in Pod in Lanao del Sur

• Implementation of Lakbay Aral and educational tour to promote awareness on the importance of watersheds and its relation to climate change.

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2 0 1 3 A N N U A L R E P O R T

Utility Plant and Depreciation Utility Plant is carried in the books at appraised values except for additions during

the year which are recorded at cost. These assets are revalued in consonance with NPC’s loan covenants with creditor banks and in pursuance to Philippine Accounting Standards (PAS) No. 16, which permits revaluation of properties, plant and equipment. Land and landholdings, which include all the cost of land and land rights used in connection with power generation and transmission, are also included in the revaluation.

Regular annual maintenance, repairs and minor replacements are charged to

expense as they are incurred, whereas major maintenance, which is done on periodic three-to five-year intervals, is deferred, amortized and charged to operations over the number of years’ interval. Rehabilitation expenditure which would result in improvement of the plant’s efficiency beyond five years are capitalized and transferred to plant cost upon completion of work orders.

Depreciation of fixed assets is charged from the date of acquisition of the fixed assets or after the completion of works. Depreciation based on depreciable values is computed using the straight line (SL) method pursuant to NPC Board Resolution No. 94-58 effective 1994, based on estimated economic lives as shown below:

Type of Plant Economic Life

1. Diesel Plants and Barges 20

2. Transmission Lines 30 Appraisal of Utility Plants

Electric Plants in Service are recorded at appraised values in pursuance to PAS No.16 which permits the appraisal of property, plant and equipment.

An independent appraiser conducts the review and appraisal of NPC’s assets once every four years. In the interim, NPC undertakes the internal revaluation which is adjusted when there are variances between the internally appraised figures and those arrived at by the independent appraisers. The last external revaluation of NPC assets was done by Resource Management International Inc. (RMII) in 1996. In 1997 and 1998, NPC applied 6% and 8% trending factors respectively for the internal revaluation.

The difference between the new over the old appraised values is recorded under the Appraisal Capital account. This account is treated as a permanent account and is not diminished by any depreciation charges.

The last revaluation of generation asset was made in 1996 and has not been

updated to date. Considering the exemptions allowed under IFRS 1, paragraph 16-19, the Corporation may establish such revalued amounts of the generation assets as “deemed cost” in line with the ongoing privatization of the NPC’s plants.

Capitalization of Interest Interests incurred on external borrowings which relate to capital projects in

progress and prior to the commencement of operation are capitalized.

Allocation of Support Group Income and Expenses

Income and expenses of the Support Services Group are allocated among operating plants and construction. The allocation rate is based on the extent of support services rendered to operations and capital projects. The present ratio of operating expenses to capital expenses of NPC is 94/6. Cost Center services that cannot be clearly classified, as well as expenses identified as having no direct effect to projects, are treated as one hundred percent operating expenses.

Investments

Local Investments are recorded at face value. Investments in foreign currency are recorded in compliance with PAS 21 using Bangko Sentral ng Pilipinas (BSP) guiding rate at the date of the transaction. Balances are reported using the closing rate at each Balance Sheet date.

Interest earnings on placements follow the accrual method of accounting.

Receivables and Allowance for Doubtful Accounts

Power and other receivables are stated net of allowance for doubtful accounts. Allowances are determined through the specific identification of uncollectible accounts.

Materials and Supplies for Operation Materials and supplies (M & S) for operation are categorized as fuel (and its

related products) and non-fuel. The Fuel M & S are composed of the fuel oil, diesel, coal & thermal chemical stocks used by NPC plants for power generation. These inventories are valued using the weighted average method. The change in accounting treatment for Fuel M & S that is from Last-in-First-out (LIFO) to weighted average method has been made effective on January 1, 2006 in compliance with PAS 2 for “Inventories”.

The non-Fuel M & S, on the other hand, are valued using the moving average method and can be further broken down into the non-fuel M & S of NPC plants and areas and those non-Fuel M & S assigned to private IPPs.

The non-Fuel M & S of NPC plants and areas represent basically the materials,

supplies and equipment received by NPC property custodian for use in operations; while non-Fuel M & S assigned to private IPPs, which are included in the Asset in Trust account, includes spares, materials and supplies transferred to private contractors as stipulated in the individual contracts.

Taxes and Duties With the enactment of R.A. 9337, otherwise known as the Reformed Value-

Added Tax (RVAT) Law of 2005, which took effect on November 1, 2005, NPC’s purchases of fuel and purchased power as well as its sale of electricity are subjected to VAT specifically stated under Sec. 24(A) of R.A. 9337 repealing Section 13 of R.A. No. 6395 on the exemption from VAT of the National Power

Corporation. Effective February 1, 2006, the value-added tax rate increased from 10% to 12% pursuant to Revenue Memorandum Circular No. 7-2006 dated January 1, 2006.

Accounting for Foreign Exchange Transactions In compliance with PAS 21 which was made effective January 1, 2005,

transactions denominated in foreign currencies are recorded at BSP Guiding Rate at the date of the transaction. Foreign exchange differentials resulting from these transactions are recorded as project cost for projects under construction while differentials pertaining to operating plants are recorded as Gain/Loss on Foreign Exchange Fluctuations. Outstanding payable accounts are reported using the closing rate at each Balance Sheet date.

Accounting for Donated Assets

NPC adopts the capital approach under Paragraph 14 of PAS 20 – Accounting for Government Grants and Disclosure of Government Assistance in recognizing donated power plants that expand the asset base regardless of whether from government or private entity. The fair values of the plants are recorded as Donated Capital under Equity, which will be reduced by annual depreciation.

Income Determination

The Corporation uses the accrual method of accounting for income and expenses and an all inclusive concept of income determination wherein all ordinary and extraordinary items pertaining to current period are considered in computing net income while items applicable to prior periods are recorded as adjustment of prior years’ income and are reflected in the Statement of Changes in Equity.

Accounting for Taxes and Duties on Importation Taxes and duties on imported materials and equipment intended for projects

are recorded as part of project costs, while taxes and duties on materials and equipment for operation are expensed as incurred.

Composition of Rate Base Rate Base is the average value of the net fixed assets in operation at the

beginning and at the end of each year. The value of net fixed assets in operation equals the gross value of the operating assets less the amount of accumulated depreciation.

Plants undergoing major rehabilitation/repair and which are out of operation for less than one calendar year are included in the computation of Rate Base.

4. UTILITY PLANT

This account consists of the following electric plants in service:

2013 2012Cost of Utility Plant 18,126,523,928 18,178,554,581Accumulated Depreciation (11,328,223,068) (10,871,086,413)Ending Net Book Value 6,798,300,860 7,307,468,168

The Decrease pertains to the Narra Diesel Power Plant generator set Unit 5 for its remaining parts as well as Brookes Point Diesel Plant for Units 1 & 2 including dilapidated power house were scrapped/sold under Release Order dated February 26, 2013 and Letter Award LAP20130212.1

5. CONSTRUCTION WORK IN PROGRESS (CWIP)

This account consists of the following:

2013 2012CWIP – Work Order 1,218,736,907 1,138,813,416CWIP - Materials & Supplies - 37,561,930

1,218,736,907 1,176,375,346

CWIP – Work Order refers to the costs of projects under construction, while CWIP – Materials & Supplies represents stock inventory intended for projects which are still in the custody of project custodians or are in transit.

6. NON-UTILITY PROPERTY

Non-utility property account consists of the following:

2013 2012Cost of Non-Utility Property 1,282,659,471 1,334,227,846Accumulated Depreciation (1,149,433,221) (1,162,295,055)Net Book Value 133,226,250 171,932,791

This amount pertains to other properties and equipments owned by the Corporation but are not used in utility operations. The Decrease pertains to the grid electrification project for the installation of solar photovoltaic at Samar treated as financial assistance to LGU.

7. NON-CURRENT RECEIVABLES

2013 2012Non-Current Power Receivables 1,917,595,152 269,662,335

The account represents the long-term portion of the restructured accounts of power customers in accordance with memorandum of agreements executed by and between NPC and the power customers.

The Increase in this account is due to following reasons:

a. Reclassification of the Accrued Utility Revenue for 3rd GRAM and 3rd ICERA pertaining to CY 2005 amounting to P1.483 Bn from current to non-current power receivables account as recommended in the 2012 COA audit observations.

N A T I O N A L P O W E R C O R P O R A T I O N

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b. Reclassification from current to non-current Power Receivables amounting to

P192.113 Mn of the following: i. Masbate Electric Cooperative, Inc. (MASELCO) due to non moving accounts

from November 2010 to December 2013. The proposal for Account Restructuring awaits the NPC Management and Board approval

ii. Customers with approved Special Payment Scheme:- Municipality of Calayan FAO Cagayan Electric Cooperative (CAGELCO)- Palawan Electric Cooperative, INC. (PALECO)- LGU Paluan

8. OTHER NON-CURRENT ASSETS

This account consists of the following:

2013 2012Restricted Cash 3,981,203 3,849,805Stock for Disposal 1,430,779 1,276,323

5,411,982 5,126,128

The Restricted Cash account pertains to the funds intended for purposes other than current operations and therefore, not immediately available to management for any disbursement transactions other than its specified purpose. The increase in restricted cash balance pertains to the Right of Way Acquisition for the transmission line projects under the Power Engineering Services Group.

9. CASH AND CASH EQUIVALENTS This account composed of the following:

2013 2012 Cash in Bank 623,566,999 257,999,922 Working Fund 8,480,006 1,340,570 Temporary Investments 4,883,297,336 4,064,000,000

5,515,344,341 4,323,340,492 The Increase in Cash in Bank pertains to partial release of NG Subsidy under SARO

No. 130017603 in the amount of P250 million and allocation of UCME for CY 2013 from PSALM.

The Increase in Temporary Investments & Working Fund attributed to the funds intended for payment of fuel payables and other financial obligations which are under process as of the balance sheet date.

10. POWER RECEIVABLES

Receivables from power customers consist of the following:

2013 2012Power Receivables 3,874,065,108 3,618,252,142Accrued Utility Revenue 482,025,666 2,387,321,066Restructured Power Receivables 51,082,252 46,022,277Due from Other Agency 3,831,829,882 3,406,863,846

8,239,002,908 9,458,459,331Allowance for Bad Debts (1,505,853,212) (1,222,981,295)

6,733,149,696 8,235,478,036

The Increase in Power Receivables is due to build up/increase of outstanding balance of ARMM Customers by P450.14 Mn and partly offset by the reclassification of total amount of P192.113 from current to current to non-current power receivable. (refer to Note 7)

The Decrease in Accrued Utility Revenue is mainly the result of reclassification from current to non-current power receivables account of 3rd GRAM and 3rd ICERA pertaining to CY 2005 amounting to P1.483 Bn as recommended in the 2012 COA audit observations. (refer to Note 7)

The Increase in Restructured Accounts pertains to set-up of CY 2014 current

restructured account and the current portion of the approved Special Payment Scheme of Municipality of Calayan for the Account of (FAO) Cagayan Electric Cooperative, Inc. (CAGELCO)

The Increase in Due From Other Agency represents receivables from PSALM pertaining to UCME which is due for remittance to NPC.

Increase of Allowance for Bad Debts is due to the increased Provisions for Bad Debts in ARMM Customers, from 10% to 50% as recommended by the Credit Management Division (CMD) of Treasury Department.

11. OTHER RECEIVABLES

This account consists of the following:

2013 2012Interest Receivable 505,391,681 331,361,240Rent Receivable 473,214 416,667Receivable from the National Gov’t. 18,486,282 69,818,333Receivable from Officers &

Employees 7,159,446 7,756,464Accounts Receivable – Others 1,648,755,624 890,009,433Output Tax Receivable 611,857,917 557,486,436Input Tax Credit on Non-Depreciable

Capital 2,451,857,806 1,893,402,102Input Tax Credit on Depreciable Capital 5,520,819 6,102,244

5,249,502,789 3,756,352,919Allowance for Bad Debts (2,357,364) (2,357,364)

5,247,145,425 3,753,995,555

The Increase in Accounts Receivables – Others account is mainly attributed to the approved NG subsidy per SARO No. F130017603 and F130332 amounting to P1.071 billion with partial released of funds amounting to P250 million.

12. MATERIALS AND SUPPLIES FOR OPERATION Details of the account are as follows:

2013 2012Gasoline 192,633 691,019Diesel 430,219,295 570,414,766Stock Transfer – Clearing Accounts 17,828,204 26,742,269Materials, Supplies and Equipment 397,034,633 405,198,559Fuel Oil 24,797,606 50,211,390

Thermal Chemicals 633,790

632,808MSE in Transit – Operating Plants 136,733,837 138,431,086Materials & Supplies Temp. Adjustments 56,633,776 56,477,488Other Oil Products 25,257,769 17,111,317

1,089,331,543 1,265,910,702

13. ADVANCES AND PREPAYMENTS AND DEPOSITS

This account consists of the following:

2013 2012Advances and Prepayments

Advances to Gov’t. Bodies & Institutions 378,093 378,093Advances to Contractors/Prepaid

Charges

36,462,297 14,052,253Marginal & Guaranty Deposits 521,651 521,651

37,362,041 14,951,997

Court and Other DepositsAdvances for Medical Group Life Ins. 11,443,732 11,343,098Court and Other Deposits 7,405,266 405,266Other Advances 7,277,960 4,827,019

26,126,958 16,575,383

Cash Advances to Officers & Employees 52,254 37,83063,541,253 31,565,210

The Increase in Advances to Contractors/Prepaid Charges is mainly due to the payment of mobilization expenses with Power Dimension Incorporated and Thermo Power Incorporated for Work Order Nos. E600A15, E600A17, 1315A17 and E800A01.

Advances for Medical & Medical Group Life Insurance refers to the advance payment to insurance companies of employees’ medical benefits which are subject to reimbursement through salary deductions.

Court and Other Deposits refers to the impending compliance of Occidental Mindoro Electric Cooperative’s (OMECO) to the Notice of Garnishment issued in the CC No. Q-1170129, Chona Dimayuga vs. NPC payment of power bills.

The Increase in Other Advances pertains to the payment of insurance premium for motor vehicle Insurance policy with GSIS.

14. TRUST ACCOUNTS

Trust Assets (PSALM) pertains to balances of accounts set-up as working capital for the operation, maintenance and management of the facilities and generation plants of the main grid under the OMA, details as follows:

Total Investments & Other Assets 1,363,946,205Cash & Cash Equivalent 604,187,954Other Receivables 5,144,383Materials & Supplies for Operation 5,306,429,164Prepayments 895,167Court and Other Deposits 9,932,333Cash Advances – Officers & Employees 20,044 TOTALS 7,290,555,250

Trust Liability - (PSALM) represents the corresponding liability to PSALM for the Trust Assets.

15. TEMPORARY REGISTRY ACCOUNTS

Temporary Registry Accounts consist of the following:

2013 2012 Retained PSALM Accounts 1,772,692,840 3,401,946,456Retained Transco Accounts 1,848,501,658 1,848,501,658

3,621,194,498 5,250,448,114

Retained PSALM and Transco Accounts consist of account balances retained at NPC by PSALM and TransCo as of the asset-debt transfer to PSALM and separation of TransCo books effective October 1, 2008, which are for further validation, reconciliation, adjustments and final transfer to PSALM, TransCo and/or NPC, as the case maybe.

16. DONATED CAPITAL

2013 2012

Donated Capital 3,051,865 2,822,788

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2 0 1 3 A N N U A L R E P O R T

The Increase in Donated Capital pertains to the land donated for NPC’s Tandubas Diesel Power Plant, Balut Diesel Plant, Balimbing Diesel Plant, Sibutu Diesel Plant and Manuk-Mangkaw Diesel Plant by the local government where the plants are located.

The Donated Capital Account is amortized over the remaining life of the assets under the Equity Method for grant.

17. RETAINED EARNINGS

The improvement of Retained Earnings is mainly the result of improved financial performance attributed to the recognition of NG subsidy in the net amount of P988 million under SARO-BMB-F-13-0017603 and F-13-01332. The total approved SARO (Special Allotment Release Order) is P1.071 billion of which 83 million was offset against the claims for reimbursement by NPC for the advances made in the preservation and maintenance of Bataan Nuclear Power Plant for the CY 2011 and CY 2012.

18. LONG-TERM DEBTS

This account consists of the outstanding foreign borrowings as follows:

CREDITOR/PROJECT Maturities

Interest Rates 2013 2012

Natixis / Credit National

Project-PRES Proj. of SPUG

2016to 2031

Fixed at 0.40% 638,453,744 572,461,612

Banque ParibasProject-PRES Proj.

of SPUG2009

to 2019Fixed at 5.09% 213,564,230 234,042,984

852,017,974 806,504,596

Year-end BSP guiding rates:

December 31, 2013 December 31, 2012

Dollar USD 1 44.414 41.1920Euro EUR 1 60.8161 54.5300

19. DEFERRED CREDITS

2013 2012Deferred Credits – Accrued Leave 571,030,542 625,061,839Unearned Interest Income – (Non-Current) 135,805,013 -Other Deferred Credits 7,302,632 7,302,632

714,138,187 632,364,471

Deferred Credits – Accrued Leaves pertains mainly to accrued leave benefits of employees in compliance with PAS no.19 which requires that short term employee benefits, including paid annual vacation leave and sick leave, be recognized as either a liability or expensed on the period they were incurred.

Unearned Interest Income – (Non-Current) pertains to the new set-up of interest charges due on the restructured accounts.

20. DEPOSITS AND TRUST FUNDS

2013 2012Deposits and Trust Funds 31,450,797 22,409,090

Deposits and Trust Funds account mainly includes amounts received and segregated for the execution of specific projects or contracts. It also includes the amounts deposited/advanced by suppliers, contractors and power customers to the Corporation.

21. UNIVERSAL CHARGE

2013 2012Universal Charge 7,443,873,875 7,135,343,428

Section 34 of the EPIRA provides that a Universal Charge (UC) to be determined, fixed and approved by the Energy Regulatory Commission (ERC) shall be imposed on all end – users for the (a) payment of stranded debts and contract costs; (b) missionary electrification; (c) equalization of taxes and royalties; (d) environmental charge; and (e) cross subsidies.

The UC shall be a non – by passable charge which shall be passed on and collected from end – users on a monthly basis by the distribution utilities to be remitted to PSALM, the administrator of the Fund.

The UC for missionary electrification shall provide funds for the operation of the NPC – SPUG, together with the sales from the missionary areas. On the other hand, the UC for environmental charge, which is equivalent to one – fourth of one centavo per kilowatt – hour (P0.0025/kwh), shall accrue to an environmental fund to be used solely for watershed rehabilitation and management and shall be managed by NPC under existing agreements.

In CY 2012, in addition to the UC of P2.763 billion, ERC granted NPC provisional authority to recover from the UC the shortfalls in Missionary Electrification Subsidy from CY 2003 to CY 2009 amounting to P3.825 billion under ERC Order on Case No. 2011-074RC dated July 30, 2012. ERC also granted NPC provisional authority for the availment of the Environmental Charge/Share from the Universal Charge for the rehabilitation and management of Watershed Areas dated July 16, 2012 amounting to P58.829 million for Watershed’s Plan 4 under ERC Order Case No. 2007-098RC and P100.554 million for Watershed’s Plan 5 under ERC Order Case No. 2008-10RC.

In CY 2013, NPC applied the ERC’s approvals, the total Universal Charges comprises the P2.763 billion UC, True-Up of P4.465 billion and Environmental Charge amounting to P215 million. The total Environmental Charges were fully collected from PSALM.

22. LOSS / GAIN ON DEBT SERVICE

2013 2012Loss / Gain on Debt Service-Prin/ICERA (2,606,190) 1,712,090

This account consists of the additional costs incurred as a result of the appreciation or devaluation of the peso currency which affects the costs of servicing foreign currency debts (excluding interest). These costs are recoverable / refundable from/to power consumers under the ICERA (Incremental Currency Exchange Rate Adjustment) upon approval by the ERC.

23. LOSS / GAIN ON FOREX FLUCTUATION

This account consists of:

2013 2012Gain/Loss on Revaluation:

Loan Payable (93,809,001) 36,927,507

The account pertains to the gain / loss in the restatement of the outstanding balance of foreign currency denominated loans as of reporting date using the BSP guiding rates.

24. INCOME FROM ADM./BACKUP/OTHER SERVICE FEE

2013 2012Income from Adm/Backup/Other Service Fee 6,401,339 68,517,702

The account consists on income derived from fees collected from new owners/administrators of NPC/IPP plants for the administration of the Transition Supply Contract between NPC and MERALCO under their respective Implementation Agreement with NPC.

25. MISCELLANEOUS INCOME

This account consists of the following:

2013 2012Income from Liquidated Damages 6,966,710 8,345,745Supplier’s Discount 17,904 167,352Rental Income 334,108 1,661,288Bid Related Income 8,782,330 2,760,108Revenue from Lease of Electric Plant 2,808,214 1,980,833Income from Donation 1,569,784 2,323,946Others 30,334,349 84,243,799

50,813,399 101,483,071

Other Miscellaneous Income consists mainly of income from sale of scrap materials and donated capital for items.

26. INTEREST EXPENSE

2013 2012

Interest Expense 17,111,986 32,121,826

This account pertains to interest expense on foreign & domestic loans. The interest expense for CY 2013 pertains to the outstanding foreign loans with BNP Paribas and Natixis. Repayment of principal with BNP Paribas commenced on December 2009 and Natixis will start on September 2017. The short term loan with Land Bank of the Philippines was fully settled on February 2012.

27. SUBSIDY TO NPP’S OF MEA AND TO SIG CUSTOMERS

2013 2012Subsidy to NPP’s of MEA and to SIG

Customers 2,200,745,985 1,479,289,940

This account pertains to subsidy to New Power Providers (NPP) of Missionary Electrification Areas (MEA) as approved by the Energy Regulatory Commission (ERC). The increase in this account is attributed to new NPPs namely: Eco Market Solutions, Palawan Power Generation, D. M. Consunji Holdings (DMCI),Mindoro Grid Corporation and Calamian Island Power Corporation.

28. MISCELLANEOUS EXPENSES

This account consists of:

2013 2012Other Taxes 11,104,104 17,518,219Others 4,617,162 9,445,243

15,721,266 26,963,562

29. SUBSIDY FROM NG (Special Allotment Release Order) refers to NG Subsidy per approved SARO-BMB-F-13-0017603 and F-13-01332, amounting to a net total of P988 million. The total approved SARO is P1.071Bn of which P83 million was offset against the claims for reimbursement of NPC advances for the preservation and maintenance of Bataan Nuclear Power Plant covering the period FY 2011 and FY 2012.

30. PROVISION FOR PRESENT OBLIGATIONS PURSUANT TO COURT RULINGS/DECISIONS

The finality of the decision of the Supreme Court on December 2, 2009 in G.R. No. 156208, Entitled “NPC DRIVERS AND MECHANICS ASSOCIATION (NPC DAMA) ET. AL., (Petitioners), -versus- THE NATIONAL POWER CORPORATION (NPC) ET. AL., (Respondents)” to cause the immediate payment due to the

N A T I O N A L P O W E R C O R P O R A T I O N

22

petitioners and all other illegally dismissed NPC personnel/employees as well as the amount of charging lien of the attorneys and the finality of the decision of the Regional Trial Court Branch 84 of Quezon City on March 23, 2009 in CIVIL CASE NO. Q-07-61728 FOR: MANDAMUS Entitled “ABNER P. ELERIA and MELITO B. LUPANGCO, (Petitioners), -versus- MR. CYRIL C. DEL CALLAR, in his capacity as PRESIDENT of the NATIONAL POWER CORPORATION (NPC) ET. AL., (Respondents), NECU AND NEWU ET.AL (Petitioners-Intervenors)” to cause payment of the COLA and AAs to NPC employees have presented obligation for NPC. The ultimate results of these lawsuits are expected to result in an outflow of resources or payment. However, the DAMA case is now pending before the Honorable Supreme Court due to status quo order issued by the Supreme Court while the MANDAMUS case is held pending due to the Petition for Certiorari and Prohibition filed by the Department of Budget Management and Office of the Solicitor General.

In accordance with PAS 37 (IAS 37), a provision shall be recognized when (i) an entity has a present obligation (legal or constructive) as result of a past event; (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and; (iii) a reliable estimate can be made of the amount of the obligation. In view thereof, included in the Temporary Registry Account are provisions for NPC’s present obligations to be assumed by PSALM Corporation, since pursuant to the EPIRA, PSALM shall take ownership not only of all generating assets, real estate, IPP contracts and other disposable assets but also of all liabilities of NPC.

The following are the status of the above cited cases:

I. G.R. No. 156208, Entitled “NPC DRIVERS AND MECHANICS ASSOCIATION (NPC DAMA) ET. AL., (Petitioners), -versus- THE NATIONAL POWER CORPORATION (NPC) ET. AL., (Respondents)”.

Status of the Case:

a. September 26, 2006 – The Honorable Supreme Court Third Division promulgated a Decision on the above case, the dispositive portion of which reads:

“WHEREFORE, premises considered, National Power Board Resolutions No. 2002-124 and 2002-125 are hereby declared VOID and WITHOUT LEGAL EFFECT. The Petition for Injunction is hereby GRANTED and respondents are hereby ENJOINED from implementing said NPB Resolutions No. 2002-124 and 2002-125.”

b. September 17, 2008 – The Supreme Court promulgated a Resolution on the Petitioners Motion for Clarification and/or Amplification which Resolved and issued the following ORDERS:

1) PARTIALLY GRANT the Petitioners Motion by affirming that, as a logical and necessary consequence of the 26 September 2006 Decision, the petitioners have the right to reinstatement, or separation pay in lieu of reinstatement, pursuant to validly approved Separation Program; plus backwages, wage adjustments, and other benefits accruing from 31 January 2003 to the date of their reinstatement or payment of separation pay; less the amount of separation benefits which were previously received under the null NPB Resolutions;

2) PARTIALLY GRANT the Motion for Approval of Charging (Attorney’s) Lien of Atty. Aldon and Atty. Orocio and ORDER the entry in the records of this case of their ten percent (10%) charging lien on the amounts recoverable by petitioners from respondent NPC by virtue of our Decision dated 26 September 2006; and

3) ORDER that Entry of Judgment be finally made in due course in the case at bar.

c. October 10, 2008 – The said “Decision and Resolution become final and executory and are thereby recorded in the Book of Entries of Judgments.”

d. December 10, 2008 – The Supreme Court issued a Resolution granting the petitioner’s Urgent Motion for Execution and accordingly issued the following ORDERS to the Chairman and Members of the National Power Board and the President of NPC to:

1) cause the preparation of a list, under oath, of (a) the names of all NPC personnel/ employees terminated/separated pursuant to NPB Resolutions No. 2002-124 and 2002-125, and (b) the amount due to each of them by way of separation pay, backwages, wage adjustments and other benefits in accordance with applicable jurisprudence on illegal dismissal, as well as interests due from the time the decision became final and executory and to compute the 10% charging lien of Atty. Orocio and Atty. Aldon pursuant to the 17 September 2008 Resolution of the Court;

2) pay or cause to be paid immediately the amounts due to the petitioners and all other illegally dismissed NPC personnel/employees as well as the amount of charging lien of Atty. Aldon and Atty. Orocio;

3) submit proof of their compliance to the orders of this Court as stated in paragraph 1 and 2 hereof within thirty (30) days from receipt of this Resolution.

e. February 9, 2009 – The Petitioners filed a Manifestation with Urgent Omnibus Motions with the Supreme Court with following PRAYERS:

1) The Chairman and Members of NP Board and NPC President be held in contempt of court and meted the penalties as may be warranted under the circumstances for failure and/or refusal to comply with the orders (Resolution) of the Honorable Court;

2) The Clerk of Court and Ex-Officio Sheriff of the Regional Trial Court of Quezon City together with his/her deputies, be appointed designated with full powers and authority to enforce by execution the 10 December 2008 resolution of this Honorable Court by garnishment/levy upon of the assets of NPC, including but not limited to the assets of PSALM, based on the list and computations submitted and attested to by the responsible NPC officials hereafter to be summoned;

3) To immediately summon the concerned and responsible NPC Officials to attest jointly and severally under oath as to the existence and correctness of said documents (Annex “C”) and submit under oath jointly and severally the certified true copies to this Honorable Court.

f. December 2, 2009 – The Supreme Court granted the petitioners’ Manifestation with Urgent Omnibus Motions dated February 9, 2009 by:

1) Ordering the Chairperson and the Members of the National Power Board and the President of NPC and their respective counsels, to SHOW CUASE why they should not be held in contempt of court for their willful failure to comply with 1 and 2 of the Resolution dated 10 December 2008 claiming that the Court’s decision nullifying NP Board Resolution No. 2002-124 and No. 2002-125 covered only 16 employees when it is clear that the Court’s decision covered all personnel/employees affected by the restructuring of the NPC;

2) Ordering the Clerk of Court of the Third Division of the Supreme Court to implead or join PSALM as a party-respondent in this case;

3) Ordering the Chairperson and the Members of the National Power Board and the President of the National Power Corporation to comply with Court’s Resolution dated 10 December 2008;

4) Directing the Clerk of Court of the Regional Trial Court and Ex-Officio Sheriff of Quezon City to cause the immediate execution of the Court’s Decision.

g. January 7, 2010 – The Supreme Court issued a Status Quo order such that no NPC assets/deposits shall be garnished until further order by the Court. The case is set for an Oral Argument on13 January 2010.

h. March 17, 2010 – The Supreme Court issued a resolution noting PSALM’s reply, OSG’s manifestation and motion to strike off certain annexes from petitioner’s manifestation.

i. July 2, 2012 – A Resolution issued noting the letters of Atty. Cornelio Aldon and 5 others and noting/granting the letter of Atty. Cecilio Gellaga and OSG’s Motion to Leave to File and Admit the Motion to Expunge from the record. Awaiting Supreme Court’s resolution of the Motion to Resolve filed by petitioner DAMA. There was a proposal made by the unions/associations for the payment of the claim at a reduced amount of P 38.9 billion. However, the OSG opined that it is proper and prudent to await the resolution of the case before any action is undertaken in relation thereto. Hence, the NP Board opted to wait for the Supreme Court’s final resolution of the case.

II. CIVIL CASE NO. Q-07-61728 FOR: MANDAMUS Entitled “ABNER P. ELERIA and MELITO B. LUPANGCO, (Petitioners), -versus- MR. CYRIL C. DEL CALLAR, in his capacity as PRESIDENT of the NATIONAL POWER CORPORATION (NPC) ET. AL., (Respondents), NECU AND NEWU ET.AL (Petitioners-Intervenors)”.

a. November 28, 2008 – The Regional Trial Court Branch 84 of Quezon

City promulgated a DECISION in favor of the Petitioners and intervenors NECU & NEWU against the respondents National Power Corporation, its President and Board of Directors and ORDERED as follows:

1. To RELEASE and to PAY the amount of Php6,496,055,339.98 representing the COLAs and AAs, and to PAY the amount of PhP704,777,508.60 representing interest computed from December 28, 2007, within 30 days from the finality of this Decision to petitioners, intervenors and other non-union employees similarly situated. The said monetary judgment shall earn another interest of 12% per annum from the date of finality of the decision until its full satisfaction;

2. To PAY Attorney’s fees in the amount of Php100,000.00 in favor of the Petitioners and PhP200,000.00 in favor of the Intervenors NECU & NEWU;

3. To DEDUCT the amount of Php145,464,872.55 representing the deficiency payment of docket and other legal fees to be taken from the said lists of Napocor officials, workers, etc., xxx and to REMIT AND PAY the same to the Office of the Clerk of Court of the Regional Trial Court of Quezon City, within 15 days from finality of the Decision and finally, to FURNISH this court proof of compliance hereof. The said amount shall be without prejudice and subject to the final computation and assessment of the Office of the Clerk of Court. The said docket and legal fees shall be a lien on this judgment and shall be first satisfied pursuant to the provisions of Rule 141 and Rule 39 of the Rules of Court;

4. DECLARING the Consultancy Agreement to be valid and binding between the counsels and the Petitioners and the Intervenors NECU & NEWU, and its members, and 4.1 To DEDUCT the FIVE percent (5%) of the amount payable to each of the NAPOCOR employees, etc., xxx AND to PAY the amount deducted to Atty. Napoleon Uy Galit and Atty. Jonathan S. Presquito, after deducting the appropriate taxes.

b. March 20, 2009 – The Court issued a Joint Order, the pertinent portion of which is hereunder quoted, viz:

1. GRANTS the Motion for Execution filed by the NPC workers, petitioners and intervenors NECU & NEWU. Accordingly, the Branch Clerk of Court is directed to forthwith issue the Certificate of Finality of Judgment and the Writ of Execution to enforce the Court’s Decision dated November 28, 2008;

2. GRANTS the motion of petitioners and intervenors to Deposit the Amount Equivalent to Judgment Award and Interest. The said amount shall be under Custodia Legis of the Court pending its distribution to the listed and qualified beneficiaries or pending appeal with the Higher Court;

3. DENIES and Dismisses the Notice of Appeal filed by the Office of the Solicitor General for utter lack of merit;

4. DENIES the Motion for Reconsideration filed by the Public Respondent Hon. Rolando G. Andaya, Jr. with finality.

23

2 0 1 3 A N N U A L R E P O R T

c. March 23, 2009 – The Branch Clerk of Court issued the CERTIFICATE OF FINALITY OF JUDGMENT. The pertinent portion of which is quoted “That in view thereof, the Decision of the Court dated November 28, 2008 has become FINAL and EXECUTORY on December 18, 2008 for petitioners and intervenors, for NPC President and Board of Directors and Public Respondent Rolando G. Andaya, Jr. and the Department of Budget and Management; and December 19, 2008 for the Office of the Solicitor General”.

d. March 23, 2009 – The Branch Clerk of Court the WRIT OF EXECUTION addressed to the Deputy Sheriff, RTC, Branch 84, Q. C., the pertinent portion of which is quoted

e. “NOW THEREFORE, you are hereby commanded to cause the execution of the aforesaid judgment together with the aforementioned implementing orders including the payment in full of your lawful fees for the service of this writ”. “You are hereby directed to submit your report on the action taken within 10 days from receipt hereof and attach copy of your report to the record of this case, pursuant to Adm. Cir. 12-89, and thereafter, until the writ is fully executed and furnishing the Parties and their counsels copy thereof”.

f. March 24, 2009 – The Sheriff IV Franklin E. Dazo issued the NOTICE TO COMPLY upon NPC which was received March 25, 2009.

g. April 15, 2009 – The Supreme Court issued TRO, on the Order, Writ of Execution and Notice Garnishment issued by RTC Branch 84.

h. May 26, 2009 – Department of Budget and Management filed a Petition for Certiorari and Prohibition. Awaiting for the Supreme Court’s Resolution of NPC’s and DBM’s petitions.

31. TARIFF DEVELOPMENT IN THE YEAR 2013

The following are the developments in Tariff for the Year 2013:

RATE APPLICATIONS:

An application was filed for the Recovery of the incremental/decrement costs/savings on fuel and purchased on fuel and purchased power and foreign currency exchange rate fluctuations covering July to December 2011 under the 9th GRAM and 9th ICERA last May 20, 2013 with the proposed rates in kwh of P1.9796 for Luzon, P1.7156 for Visayas and P1.9888 for Mindanao. If approved as filed, this may result to an additional revenue of P2.287Bn.

Another rate application for the Recovery of the incremental/decrement costs/savings on fuel and purchased power and foreign currency exchange rate fluctuations covering January to December 2012 under the 10th GRAM and 10TH ICERA was filed in September 10, 2013 with proposed rates in kwh of P1.5011 for Luzon, P1.4937 for Visayas and P1.8214 for Mindanao. If approved as filed, this application may result to an additional of P4.221Bn.

A True-Up application to recover the Shortfall in the Universal Charge for Missionary Electrification (UCME) for the year 2012 was filed in September 20, 2013 amounting to P5.370Bn or a proposed rate of P0.0782/kwh to be charged to nationwide electricity customers. This application was approved as filed already includes the amount in applied in the 10th GRAM & ICERA applications mentioned above.

RATE APPROVALS.

The Energy Regulatory Commission (ERC) issued the Decision for True-Up Adjustment of UCME Subsidy for CY 2011 in August 12, 2013. The total approved amount is P4.65Bn or P0.0709/kwh effective December 26, 2013. The Commission also approved the Same decision, which is the basic UCME of P2.7Bn for CY 2014. Last October 19, 2013, ERC issued the Decision for True-Up Adjustment of UCME Subsidy for CY 2010 amounting to P2.57Bn or P0.0381/kwh effective December 26, 2013.

32. UPDATE ON PRIVATE SECTOR PARTICIPATION PROGRAM IN THE POWER GENERATION IN SPUG-SERVICED AREAS

In line with the government thrust to privatize the power industry including the operation of NPC – SPUG plants and minimize the subsidy on these areas, the following are the developments on the participation of the private sector in the power generation in the SPUG serviced areas:

NEW POWER PROVIDER LOCATION STATUS

1. Bantayan Island Power Corporation-(BIPCOR) Bantayan Island Operational and UCME recipient since May 20062. Palawan Power Generation Inc. Mainland Palawan Operational and UCME recipient since May 20083. Delta P Mainland Palawan Operational and UCME recipient since April 20094. Powersource Phils. (QTP) Bataraza, Palawan Operational and UCME recipient since July 20105. D. M. Consunji Holdings –(DMCI) Masbate Mini Grid Operational and UCME recipient since August 20106. Catanduanes Power Generation Inc. Catanduanes Operational and UCME recipient since July 2011.7. Ormin Power Inc. Oriental Mindoro Operational and UCME recipient since November 2011.8. Power One Corporation/ Mid Island P Power Corporation Oriental Mindoro Operational and UCME recipient since May 2012.9. SUNWEST Water & ElectricCompany Catanduanes Operational as of December 3, 201210. Calamanian Islands Power Corporation Busuanga PSA with ERC11. Linao Mini Hydro (Lower Cascade) Oriental Mindoro Operational As of December 3, 201212. Gigawatt-Vivant Busuanga On-going construction of power plant facilities

13. Siquijor Island Power Corporation Siquijor

PROSIELCO Board approved the Swiss Challenge and awarded it to Siquijor Island Power Corporation (SIPCOR). They sought the opinion of Solicitor General for its legality. The SolGen declared it as illegal considering that the NPP is a beneficiary of the UCME.

14. Mindoro Grid Corporation Oriental Mindoro Operational as of December 3, 201215. 3iPowergen Tablas, Marinduque, Romblon No power plant yet16. Coastal Power Development Corporation Basilan No power plant yet17. Philippine Hybrid Energy Systems, Inc. (PHESI) Oriental Mindoro No power plant yet

33. SUPPLEMENTARY INFORMATION REQUIRED UNDER RR No. 15-2010

In compliance with the requirements set forth by Revenue Regulations No 15-2010 hereunder are the information on taxes, duties and license fees paid or accrued during the taxable year.

The Corporation is a VAT - registered company with VAT output tax declaration of P247,287,531.85 the year based on the amount reflected in the Sales Account of P2,060,729,432.08

The Corporation has zero-rated/exempt sales amounting to P6,895,283.14 pursuant to the provisions of Sections 106 (A)(2) and 108 (B) of the National Internal Revenue Code, as amended.

The amount of VAT Input taxes claimed are broken down as follows:

Beginning Balance, Jan 2013 2,496,009,919.29

Current year’s purchases:

I. Non-Capital Goods (fuel, materials & equipment spares)

459,634,355.29

II. Capital goods 13,160,058.59

III. Services 343,685,674.45

816,480,088.83

3,312490,008.12Claims for tax credit/refund and other adjustment -

Ending Balance, Dec 2012 3,312,490,008.12

Other taxes and licenses pertain to:

Nature

Realty Tax 555,942.13

Documentary stamps on bank transactions 9,680.40

565,622.53

The amount of withholding taxes paid/occurred for the year amounted to:

Nature In pesos

i. Tax on compensation and benefits 71,289,831.15

ii. Creditable withholding taxes 104,806,123.83

iii. Final Vat / Final withholding taxes 331,834,036.17

507,929,991.15

24

N A T I O N A L P O W E R C O R P O R A T I O N

Management Committee

1

2

5

6

7

4

3

1. MA. GLADYS CRUZ-STA.RITA PRESIDENT AND CEO

4. MELCHOR P. RIDULME VICE PRESIDENT OFFICE OF THE GENERAL COUNSEL (JAN-MAR 2013) VICE PRESIDENT OFFICE OF THE LEGAL COUNSEL ( APRIL-DEC 2013)

7. URBANO C. MENDIOLA, JR. OIC-VICE PRESIDENT CORPORATE SERVICES (JAN-MAR 2013) VICE PRESIDENT CORPORATE AFFAIRS (APRIL-DEC 2013)

2. DANILO S. SEDILLA VICE PRESIDENT SMALL POWER UTILITIES GROUP

5. LORNA T. DY VICE PRESIDENT HUMAN RESOURCES, ADMINISTRATION & FINANCE

6. KATAMBAYAN S. CELINO VICE PRESIDENT TECHNICAL AND MAINTENANCE SERVICES (JAN-MAR 2013) VICE PRESIDENT POWER ENGINEERING SERVICES (APRIL-DEC 2013)

3. RUDY P. BRIOSO VICE PRESIDENT MINDANAO GENERATION

25

2 0 1 3 A N N U A L R E P O R T

8

9

10

12

13

15

14

11

8. MANUEL LUIS B. PLOFINO SENIOR DEPARTMENT MANAGER RESOURCE MANAGEMENT SERVICES (APRIL-DEC 2013)

10. ROMUALD MA.T. BELTRAN DEPARTMENT MANAGER DAMS MANAGEMENT DEPARTMENT

14. JUAN CARLOS J. GUADARRAMA VICE PRESIDENT SALES AND SERVICES (JAN-MAR 2013)

9. EMMANUEL A. UMALI DEPARTMENT MANAGER WATERSHED MANAGEMENT DEPARTMENT

15. MAURO L. MARCELO OIC VICE PRESIDENT LOGISTICS (JAN-MAR 2013)

11. PIO J. BENAVIDEZ SENIOR VICE PRESIDENT (JAN-SEP 2013)

13. OSCAR C. LORICO VICE PRESIDENT LUZON VISAYAS GENERATION (JAN-MAR 2013)

12. LORENZO S. MARCELO VICE PRESIDENT PPPA/APD/IPPCM (JAN-MAR 2013)

FROILAN A. TAMPINCO PRESIDENT (JAN-JULY 2013)

26

N A T I O N A L P O W E R C O R P O R A T I O N

1

Board ofDirectors

1

2

4 5

6 7

9

8

3

9. MA. GLADYS CRUZ-STA.RITA PRESIDENT & CEO (NPC) MEMBER

ATTY. VICTOR GAUDENCIO C. GARCIA CORPORATE SECRETARY

VEDALISA N. AREVALO SENIOR DEPARTMENT MANAGER,INTERNAL AUDIT DEPARTMENT

3. SEC. FLORENCIO V. ABAD DEPARTMENT OF BUDGET & MANAGEMENT MEMBER

6. SEC. PROCESO J. ALCALA DEPARTMENT OF AGRICULTURE MEMBER

4. SEC. ARSENIO M. BALISACAN NATIONAL ECONOMIC & DEVELOPMENT AUTHORITY

5. SEC. RAMON J.P. PAJE DEPARTMENT OF ENVIRONMENT & NATURAL RESOURCES MEMBER

7. SEC. GREGORY L. DOMINGO DEPARTMENT OF TRADE & INDUSTRY MEMBER

8. SEC. MANUEL A. ROXAS DEPARTMENT OF INTERIOR & LOCAL GOVERNMENT

1. SEC. CESAR V. PURISIMA DEPARTMENT OF FINANCE CHAIRMAN

2. SEC. CARLOS JERICHO L PETILLA DEPARTMENT OF ENERGY VICE-CHAIRMAN

NEGROS OR.

BATANES

CALAYAN

CAMIGUIN

CAGAYAN

KALINGA

ISABELA

AURORA

QUEZON

BATANGAS

MINDORO

MARINDUQUE

CAMARINES SUR

CATANDUANES

ALBAY

MASBATE

CALUYA

ANTIQUE

GUIMARAS

NEGROS OCC. CEBU

BANTAYAN

S. LEYTE

SURIGAO DEL NORTE

BOHOL

SIQUIJOR

CAMOTES

N. SAMAR

W. SAMARE. SAMAR

ROMBLON

KABUGAO

PALAWAN

DAVAO DEL SUR

SULTANKUDARAT

ZAMBOANGADEL SUR

BASILAN

SULU

JOLOTAWI-TAWI

OTHER SPUG UTILITIES

* Some SPUG utilities may not be visible due to the size limitation of the map layout

ABCDEFGHIJK

97 | 98 | 99

107 | 109

102 | 104

103 | 105 | 106

33 | 34

37 | 38

67 | 114 | 115 | 116

68 | 117 | 118 | 119

125 | 126 | 131

120 | 122 | 123 | 127 | 128 | 130

78 | 79

L U Z O N

M I N D A N A O

V I S A Y A S

13

11

100

101

9 7

10

12

14

15

4

5

6

27112

113

28

2625

1023

12

39

31

30

32

36

49

52

46

42

44

45

43

40

41

111

50

60

2223

35

29

110

108 19

16

18

2120

2472

17

105101

55

62

575658

61

124

66

134

132

133

121127

60

65

63

53

90

89

88

91

65

64

47

135

9293

94136

96

95

85

84

86

51

48

B

70 69

71

54

55

59

8387

82 80

81

77

76

75

74

73

A

F

E

D

C

J

K

I

G H

8

HEDCOR

PGPP1

AGUS 4

BAUANG

NAVOTAS

NMHC

AGUS 5

AGUS 7

SPPC

PGPP2

WMPC

BUSUANGA

PULANGUI

PB118

PB117

PB104

ILIGAN DIESEL I/II

ENRON

LEYTE B

LEYTE A

PDPP IPDPP II

LBGT

CTPP

CDPP

PB101

BDPP

PB102

L O C A T I O N M A P O F

S P U G P O W E R P L A N T S

PLANT LOCATION RATED

49 Guintarcan DPP Guintarcan, Cebu 0.263

50 Doong DPP Doong, Bantayan, Cebu 0.326

51 Siquijor DPP Candanay, Siquijor 4.200

52 Power Barge 113 Candanay, Siquijor 2.700

53 Power Barge 116 Candanay, Siquijor 3.480

54 Gigantes DPP Gigantes, Estancia,Iloilo 0.326

55 Caluya DPP Caluya, Antique 0.590

56 Camotes DPP Camotes, Cebu 2.688

57 Pilar DPP Ponson Is, Cebu 0.576

58 Maripipi DPP Maripipi Is., Biliran 0.326

59 Limasawa DPP P. Burgos, S. Leyte 0.326

60 Zumarraga DPP Catbalogan, Samar 0.589

61 Tagapul-an DPP Tagapul-an, W. Samar 0.263

62 Almagro DPP Almagro W. Samar 0.263

63 Sto Nino DPP Sto Niño, W. Samar 0.263

64 San Antonio DPP Victoria, Samar 0.576

65 Capul DPP Victoria, Samar 0.326

66 San VicenteDPP Victoria, Samar 0.263

67 Biri DPP Lavezares, Samar 0.489

18.833

VISAYAS EXISTING PLANTS

PLANT LOCATION RATED/MW

1 Boac DPP Boac, Marinduque 8.222

2 Torrijos DPP Marinduque 0.500

3 Power Barge 120 Marinduque 7.200

4 Polillo DPP Quezon 2.680

5 Jomalig DPP Quezon 0.263

6 Patnanungan DPP Quezon 0.326

7 Basco DPP Basco, Batanes 3.200

8 Wind Turbine Basco, Batanes 0.180

9 Sabtang DPP Batanes 0.326

10 Itbayat DPP Batanes 0.326

11 Calayan DPP Cagayan 0.426

12 Kabugao DPP Apayao 0.643

13 Palanan DPP Isabela 0.523

14 Casiguran DPP Aurora 2.535

15 Balongbong Hydro Catanduanes 1.800

16 Marinawa DPP Catanduanes 4.270

17 Power Barge 110 Catanduanes 2.240

18 Viga DPP Catanduanes 2.120

19 Rapu-Rapu DPP Rapu-Rapu Is., Albay 0.826

20 Batan DPP Batan Is., Albay 0.489

21 Ticao DPP Ticao Is., Masbate 1.700

22 Pulang Lupa DPP San Jose, Occ. Mindoro 10.000

23 Power Barge 106 Occidental Mindoro 14.400 24 Calapan Modular (Rental) Oriental Mindoro, Mapsa &

Sablayan Area 10.800

25 Mamburao Modular (Rental) Mamburao Occ. Mindoro 5.000

26 Lubang DPP Lubang Is. Occ. Mindoro 2.304

27 Tingloy DPP Tingloy Is., Batangas 1.183

28 Tablas DPP Odiongan, Romblon 5.720

29 Power Barge 109 Looc, Romblon 1.740

30 Romblon DPP Romblon, Romblon 2.060

31 Power Barge 114 Romblon, Romblon 2.550

32 Sibuyan DPP Sibuyan Is., Romblon 1.903

33 San Jose DPP (Carabao) Carabao Is., Romblon 0.554

34 Banton DPP Banton Is., Romblon 0.326

35 Corcuera DPP Corcuerra Is., Romblon 0.826

36 Concepcion DPP Concepcion Is. Romblon 0.326

37 El Nido DPP Palawan 2.375

38 Roxas DPP Palawan 2.293

39 Taytay DPP Palawan 0.830

40 San Vicente DPP Palawan 0.923

41 Busuanga DPP Busuanga Is., Palawan 4.100

42 Culion DPP Culion Is., Palawan 0.603

43 Linapacan DPP Palawan 0.213

44 Cuyo DPP Cuyo Is., Palawan 2.000

45 Araceli DPP Palawan 0.326

46 Balabac DPP Balabac Is., Palawan 0.326

47 Cagayancillo DPP Cagayancillo Is., Palawan 0.217

48 Agutaya DPP Palawan 0.326

115.019

LUZON EXISTING PLANTS

PLANT LOCATION RATED

68 Basilan DPP Basilan 10.852

69 Power Barge 119 Basilan 7.200

70 Jolo DPP Jolo Island, Sulu 11.940

71 Luuk DPP Jolo Island, Sulu 0.379

72 Siasi DPP Siasi, Sulu 2.080

73 Bongao DPP Tawi Tawi 1.088

74 Power Barge 108 Tawi Tawi 5.400

75 Balimbing DPP Batu-Batu, Tawi-Tawi 0.726

76 Tandubas DPP Tawi-Tawi 0.258

77 Sibutu DPP Sibutu, Tawi-Tawi 0.326

78 Sitangkay DPP Sitangkay, Tawi-Tawi 0.560

79 Manuk Mangkaw DPP East Simunul, Tawi-Tawi 0.163

80 W. Simunul DPP West Simunul, Tawi-Tawi 0.727

81 Cag. De TawiTawi DPP Tawi-Tawi 1.020

82 Tandubanak DPP Sibutu, Tawi-Tawi 0.435

83 Dinagat DPP Surigao Del Norte 3.739

84 Loreto DPP Surigao Del Norte 0.940

85 Hikdop DPP Surigao Del Norte 0.283

86 Kalamansig DPP Sultan Kudarat 3.420

87 Power Barge 111 Sultan Kudarat 0.560

88 Ninoy Aquino DPP Sultan Kudarat 0.683

89 Abad Santos DPP Davao Del Sur 0.423

90 Balut DPP Davao del Sur 0.326

91 Talicud DPP Davao del Norte 0.586

54.114

MINDANAO EXISTING PLANTS

PLANT LOCATION RATED

92 Maniwaya DPP Sta Cruz, Marinduque 0.104 93 Mongpong DPP Sta Cruz, Marinduque 0.104 94 Polo DPP Sta Cruz, Marinduque 0.092 95 Balatubat DPP Cagayan 0.120 96 Minabel DPP Cagayan 0.055 97 Maconacon Isabela Maconacon Isabela 0.240 98 Guin-awayan DPP Placer Masbate 0.035 99 Gilotongan DPP Cawayan, Masbate 0.090 100 Nabuctot DPP Placer Masbate 0.025 101 Peña DPP Cawayan, Masbate 0.090 102 Chico DPP Cawayan, Masbate 0.035 103 Lahuy DPP Camarines Sur 0.120 104 Haponan DPP Camarines Sur 0.035 105 Quinalasag DPP Camarines Sur 0.150 106 Burias DPP Burias Is., Masbate 0.983 107 Dancalan DPP Burias Is., Masbate 0.080 108 Mababang Baybay DPP Burias Is., Masbate 0.060 109 Malaking Ilog DPP Burias Is., Masbate 0.060 110 Osmeña DPP Burias Is., Masbate 0.080 111 Peñafrancia DPP Burias Is., Masbate 0.080 112 Quezon DPP Burias Is., Masbate 0.060 113 Rizal DPP Palawan 0.423 114 Paluan DPP Mindoro 0.800 115 Cabra DPP Cabra Is., Lubang, Occ. Mindoro 0.180 116 Costa Rica DPP Almagro W. Samar 0.240 117 Lunang DPP Almagro W. Samar 0.120 118 Biasong DPP Almagro W. Samar 0.060 119 Cabungaan DPP Sto Niño, W. Samar 0.040 120 Ilijan DPP Sto Niño, W. Samar 0.040 121 Takut DPP Sto Niño, W. Samar 0.100 122 Kerikite DPP Almagro W. Samar 0.060 123 Libucan DPP Libucan W. Samar 0.080 124 Bagongon DPP Catbalogan, Samar 0.060 125 Buluan DPP Catbalogan, Samar 0.040 126 Cinco-Rama DPP Catbalogan, Samar 0.100 127 Bagongbanwa DPP Bohol 0.038 128 Balicasag DPP Bohol 0.038 129 Batasan DPP Bohol 0.056 130 Bilangbilangan DPP Bohol 0.020 131 Cabilao DPP Bohol 0.150 132 Cuaming DPP Bohol 0.086 133 Hambongan DPP Bohol 0.020 134 Mantatao DPP Bohol 0.038 135 Mocaboc DPP Bohol 0.020 136 Pamilacan DPP Bohol 0.056 137 Pangapasan DPP Bohol 0.015 138 Ubay DPP Bohol 0.012 139 Batbatan DPP Culasi, Antique 0.100 140 Guiwanon DPP Nueva Valencia, Guimaras 0.036 141 Sibolo DPP Caluya, Antique 0.030 142 Sacol DPP Sacol Is., Zamboanga 0.150 143 Palimbang DPP Sultan Kudarat 0.698

6.605

List of SPUG Power Plants (As of December 31, 2013)

N A T I O N A L P O W E R C O R P O R A T I O N

MINI GRID AND TRANSFERRED

PLANT LOCATION RATED

144 B. TITONG MGE 1 Masbate City 0.012145 B. TITONG MGE 2 Masbate City 0.012146 CAWAYAN EXT. Masbate City 0.012147 CAWAYAN EXT. (Bel-at) Masbate City 0.012148 UBONGAN DACU Masbate City 0.012149 BOLO MGE 1 Masbate City 0.012150 BOLO MGE 2 Masbate City 0.012151 BOLO MGE 3 Masbate City 0.012152 TINAGO MG1 Masbate City 0.012153 CABANGCALAN Aroroy 0.012154 PINANAAN Aroroy 0.012155 LANANG Aroroy 0.012156 SAN ISIDRO Aroroy 0.012157 SYNDICATE Aroroy 0.012158 SAWANG (MG1) Aroroy 0.012159 SAWANG (MG2) Aroroy 0.006160 TALIB MG1 Aroroy 0.012161 TALIB MG2 Aroroy 0.012162 CONCEPCION Aroroy 0.012163 BALETE Aroroy 0.012164 AMUTAG MG1 Aroroy 0.012165 AMUTAG MG2 Aroroy 0.012166 CALANAY MG1 Aroroy 0.012167 CALANAY MG2 Aroroy 0.006168 BALAWING Aroroy 0.006169 CABAS-AN Aroroy 0.006170 DAYHAGAN MG1 Aroroy 0.012171 DAYHAGAN MG2 Aroroy 0.006172 Gumahang MG1 Aroroy 0.012173 Gumahang MG2 Aroroy 0.012174 Gumahang MG3 Aroroy 0.012175 MACABUG Aroroy 0.012176 MARIPOSA Aroroy 0.012177 MATABA Aroroy 0.012178 MATALANGTANG Aroroy 0.012179 MATONGOG MG1 Aroroy 0.012180 MATONGOG MG2 Aroroy 0.006181 SAN AGUSTIN MG1 Aroroy 0.012182 SAN AGUSTIN MG2 Aroroy 0.006183 TIGBAO MG1 Aroroy 0.012184 TIGBAO MG2 Aroroy 0.006185 TIGBAO MG3 Aroroy 0.012186 TIGBAO MG4 Aroroy 0.006187 TINIGBAN MG1 Aroroy 0.012188 TINIGBAN MG2 Aroroy 0.012189 TINIGBAN MG3 Aroroy 0.012190 TINIGBAN MG4 Aroroy 0.012191 JAMORAWON MG1 Milagros 0.006192 JAMORAWON MG2 Milagros 0.012193 JAMORAWON MG3 Milagros 0.012194 JAMORAWON MG4 Milagros 0.006195 TAGBON Milagros 0.012196 TIGBAO MG1 Milagros 0.012197 TIGBAO MG2 Milagros 0.012198 TIGBAO MG3 Milagros 0.006199 TIGBAO MG4 Milagros 0.006200 TIGBAO MG5 Milagros 0.006201 MAGSALANGI Milagros 0.006202 PAMANGPANGON Milagros 0.012203 CALUMPANG Milagros 0.012204 CALASUCHE Milagros 0.012205 DOCOL Baleno 0.006206 BAAO Baleno 0.006207 LOOC, MANDAON Mandaon 0.012208 LANTANGAN MG1 Mandaon 0.012209 LANTANGAN MG2 Mandaon 0.006210 BUGTONG Mandaon 0.012211 TUMALAYTAY MG1 Mandaon 0.012212 TUMALAYTAY MG2 Mandaon 0.012213 TUMALAYTAY MG3 Mandaon 0.006214 CABANGCALAN Placer 0.012215 CALUMPANG Placer 0.006216 LOCSOAN Placer 0.012217 TAN-AWAN Placer 0.012218 LUNA MG1 Placer 0.012219 LUNA MG2 Placer 0.012220 LUNA MG3 Placer 0.012221 MAHAYAHAY Placer 0.006222 NAGARAO Placer 0.012223 ITOMBATO Cawayan 0.012224 IRAYA, CAWAYAN Cawayan 0.012225 CABAYUGAN MG1 Cawayan 0.012226 CABAYUGAN MG2 Cawayan 0.006227 CALUMPANG Cawayan 0.006228 PANANAWAN MG1 Cawayan 0.012229 PANANAWAN MG2 Cawayan 0.012230 CAMPANA Uson 0.006231 CANDELARIA MG1 Uson 0.012232 CANDELARIA MG2 Uson 0.012233 BONIFACIO MG1 Uson 0.012234 BONIFACIO MG2 Uson 0.006235 SAN JOSE Uson 0.012236 MATAYUM MG1 Cataingan 0.012237 MATAYUM MG2 Cataingan 0.012238 MATAYUM MG3 Cataingan 0.006239 PITOGO MG1 Cataingan 0.006240 PITOGO MG2 Cataingan 0.006241 MADAMBA MG1 Cataingan 0.012

PLANT LOCATION RATED

242 MADAMBA MG2 Cataingan 0.006243 LIBTONG Cataingan 0.006244 OSMENA Cataingan 0.006245 AGUADA Cataingan 0.012246 SAN RAFAEL Cataingan 0.012247 NADAWISAN Cataingan 0.006248 MAGCARAGUIT MG1 Dimasalang 0.012249 MAGCARAGUIT MG2 Dimasalang 0.012250 MAGCARAGUIT MG3 Dimasalang 0.012251 T. R. YANGCO Dimasalang 0.012252 JINTOTOLO MG1 Balud 0.012253 JINTOTOLO MG2 Balud 0.012254 JINTOTOLO MG3 Balud 0.006255 SAN ANTONIO MG1 Balud 0.012256 SAN ANTONIO MG2 Balud 0.006257 CANTIL MG1 Balud 0.012258 CANTIL MG2 Balud 0.006259 CANTIL MG3 Balud 0.006260 CANTIL MG4 Balud 0.006261 SAPATOS Island Balud 0.012262 SAWMILL Mobo 0.012263 BAANG Mobo 0.006264 MABUHAY Mobo 0.012265 SOROSIMBAJAN MG1 Esperanza 0.006266 SOROSIMBAJAN MG2 Esperanza 0.012267 COSTA RICA Batuan 0.012268 MATABAO, Batuan Batuan 0.012269 RIZAL, Batuan Batuan 0.006270 LUNA San Jacinto 0.012271 ALTA VISTA San Fernando 0.012272 DON PABLO DELA ROSA Aroroy 0.012273 PANGLE Aroroy 0.012274 BARA MG1 Milagros 0.012275 BARA MG2 Milagros 0.012276 BARA MG3 Milagros 0.012277 GUILUTHANGAN MG1 Milagros 0.012278 GUILUTHANGAN MG2 Milagros 0.006279 SAWMILL MG1 Milagros 0.006280 SAWMILL MG2 Milagros 0.006281 MATAGBAK Milagros 0.012282 SAN CARLOS Milagros 0.012283 BURI Mandaon 0.012284 CAGMASOSO Mandaon 0.012285 POLO DACU Mandaon 0.012286 R M MAGBALON Cawayan 0.012287 COBRE IS. PENA Cawayan 0.012288 SAN VICENTE Uson 0.012289 BURACAN Dimasalang 0.012290 QUINAYANGAN DIOTAY Balud 0.012291 QUINAYANGAN TONGA Balud 0.012292 SAN ANDRES Balud 0.006293 SAN ROQUE Esperanza 0.006294 BUGTONG Pio V. Corpuz 0.012295 STO. NINO Monreal 0.012296 DANAO San Jacinto 0.012297 SAN ANTONIO Milagros 0.006

1.554

2 0 1 3 A N N U A L R E P O R T

PRES MASBATE

NO. OF PLANTS RATED/MW

Luzon Existing 48 115.019

Visayas Existing 19 18.833

Mindanao Existing 24 54.114

MiniGrid and Transferred 52 6.605

PRES 154 1.554

TOTAL 297 196.125

NO. OF PLANTS RATED/MW

Eco Market Solutions Inc. (EMS)/ Casiguran, Aurora

1 2.000

SUWECO HPP/Catanduanes 1 3.100CPGI/Catanduanes 1 3.600DMCI/Masbate 1 24.400Mid Island (Power One)/Or. Mindoro 1 9.000DULANGAN MHPP c/o ORMECO/Occ. Mindoro 1 1.600GLOBAL POWER/Or. Mindoro 1 7.500ORMIN/Or. Mindoro 1 7.200LINAO MINI-HYDRO/Or. Mindoro 1 2.100MINGRID CORP./Or. Mindoro 1 5.000INGRID CORP (Bongabon)/Or. Mindoro 1 5.000CANTINGAS MINI-HYDRO/Sibuyan, Romblon 1 0.900DMCI/Mainland Palawan 1 15.000Delta P/Mainland Palawan 1 16.000PPGI/ Mainland Palawan 1 19.000Calamianan Island Power Corp. (CIPC)/ Coron, Palawan

1 7.980

BIPCOR/Bantayan Cebu 1 8.30017 137.680

NPC PLANTS INCLUDING RENTAL

IPP/NPP

WATERSHED MANAGEMENT DEPARTMENT

EMMANUEL A. UMALIDepartment Manager, WMD

ROSAURO C. ORTIZWatershed Management Analyst, WMD

DAMS MANAGEMENT DEPARTMENT

ROMUALDO MA. T. BELTRANDepartment Manager, DMD

RESOURCE MANAGEMENT SERVICES

ATTY. MANUEL LUIS B. PLOFINOSenior Department Manager, RMS

CORPORATE AFFAIRS GROUP

BERNADETTE T. RIVEROManager, Strategic & Business

Planning Division

MODESTA M. ILUSTRECorporate Staff Specialist B, Systems

Planning Division

LOGISTICS

ATTY. NATALIA O. GUINTOManager, Logistics Department

ZOL D. MEDINAManager, Bids & Contracts Services Division

CHAIRPERSON

URBANO C. MENDIOLA, JR.Vice President , Corporate Affairs Group

VICE CHAIRPERSON

LORNA T. DYVice President, Human Resource,Administration and Finance Group

DANILO S. SEDILLAVice President, Small Power

Utilities Group

ATTY. PATRICK D. MABBAGUActing Chief of Staff, Office

of the President

ROY O. PAJEOIC, Corporate Communications Division

MEMBEROFFICE OF THE PRESIDENT

JOSE ROEL V. BAGAYCorporate Staff Analyst

NIÑA NERISA DL. TORRES

Corporate Staff Analyst

CORPORATE COMMUNICATIONS DIVISION

ALMA P. HERMOSURACorporate Communications Officer A

BEEJAY S. ABADCorporate Communications Officer D

FINANCE

ALEXANDER P. JAPONSr. Department Manager, Finance

JUDITH M. MOJICAManager, Controller’s Department

ELMA G. CHACONManager, Financial Reporting, Review

and Control Div.

ROSANNA L. TIOSANSr. Financial Specialist B, Financial

Reporting, Review and Control Division

SMALL POWER UTILITIES GROUP

RENE B. BARRUELAManager, Operations Planning &

Performance Assessment Department

BIVERLY B. ESTELLAManager, Planning & Performance

Assessment Division

LUIS F. MONTILLAManager, Operations Project Division

National Power Corporation 2013ANNUAL REPORT WORKING COMMITTEE

30

N A T I O N A L P O W E R C O R P O R A T I O N