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MALACAÑAN PALACE
MANILA

BY THE PRESIDENT OF THE PHILIPPINES

[ Memorandum Order No. 318, November 22, 1972 ]

CREATING AN INTER-AGENCY TEAM TO CONDUCT AN OVERALL MANAGEMENT/FINANCIAL AUDIT OF THE MANILA ELECTRIC COMPANY.

There is hereby an inter-agency team to conduct an overall management/financial audit of the Manila Electric Company and recommend corrective measures/ policies to rationalize the operations/expansion of the Meralco and achieve cost savings to reduce the price of power to the public.

The Inter-Agency Management/Financial Audit Team shall be composed of the following:

Mr. Juan Matutina Corporate Auditor, National Power Corporation	Team Leader
Colonel Francisco Gatmaitan Military Commander, Meralco	Asst. Team Leader
Mr. Roberto de Ocampo National Electrification Administration	Member
Mr. Cipriano Pastor Power Development Council	Member
Mrs. Josefina Segui Presidential Economic Staff	Member
Mr. Eugenio Ocampo Development Bank of the Philippines	Member
Mr. Casiano Endriga Securities Exchange Commission	Member
Mr. Anthony Villegas National Electrification Administration	Member
Mr. Arnulfo Ramirez Development Management Staff	Member
Representative General Auditing Office	Member
Representative Department of Finance	Member

The Secretary of National Defense is hereby authorized to appoint such other members of the team as, in his discretion, he may judge necessary for the proper conduct of the audit.

Pursuant to the above objectives, the Inter-Agency Management/Financial Audit Team, shall undertake the following:

1. Conduct an in-depth financial study of Meralco to determine the financial requirements of the firm, necessary to maintain its financial viability, while operating within the program, policy framework set by the Power Development Council.

2. Recommend measures to meet the financial requirements of Meralco (if found to be necessary), and should government financial assistance be require to insure that this government capital exposure be adequately protected.

3. Conduct an in-depth study of the interrelations of Meralco with its sister companies, for the purpose of determining the most economic and effective arrangement that will protect the public interest and improving the cost performance/efficiency of Meralco.

4. Study Meralco’s cost of operations and propose an economy program to minimize unnecessary expenses.

5. Review cost accounting practices to serve as a basis for assessing Meralco rate structure and policies.  Particular attention is to be given to depreciation policies and asset valuation.1aшphi1

6. Study the financial implications of State ownership/operation of generating facilities.

7. Provide staff assistance to Government representatives in the Meralco Board.

The Inter-agency Audit Team shall submit its first report to the Chairman of the Development Council for transmittal to the President within 60 days from the effectivity of this order.

The Audit Team is authorized to call upon all government departments, bureaus, offices and agencies for such assistance as it may deem necessary in discharging its functions.

By authority of the President:

(Sgd.) ALEJANDRO MELCHOR
Executive Secretary

Manila, November 22, 1972

The Lawphil Project - Arellano Law Foundation

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