WHEREAS, Section 2 of Republic Act No. 7638 declares the policy of the State, among others, to ensure a continuous, adequate, and economic supply of energy with the end in view of ultimately achieving self reliance in the country's energy requirements through the integrated and intensive exploration, production, management, and development of the country's indigenous energy resources;

WHEREAS, Sections 5(b) and 5(c) of R.A. 7638 mandate the Department of Energy (Department) to establish and administer programs for the exploration, transportation, marketing, distribution, utilization, conservation, stockpiling, and storage of energy resources of all forms which include coal, in order to meet the country's increasing energy requirements and reduce its dependence on imported fuels;

WHEREAS, under Section 5(d) of R.A. 7638, the Department likewise exercises supervision and control over all government activities relative to energy projects in order to attain the goals embodied in Section 2 of said Act;

WHEREAS, the Department with the support of the Philippine coal mining industry has prepared a Coal Industry Action Plan, in consultation with other agencies, for the purpose of, among others, creating a guaranteed market for local coal;

WHEREAS, to ameliorate and facilitate the marketing of coal by local coal producers thereby upgrading their financial viability, it is deemed necessary to issue this Circular.

ACCORDINGLY, the Department promulgates the following guidelines for the information, guidance and implementation of all concerned.

SECTION 1. The National Power Corporation (NPC) is hereby required to utilize local coal for at least ten percent (10%) of its total coal requirements.

SECTION 2. NPC shall submit to the Department, through the Energy Industry Administration Bureau, the necessary reports covering each semester within the month next following said semester, to establish compliance with this Circular.

SECTION 3. This Circular shall take effect immediately a day after its complete publication in a newspaper of general circulation.

Adopted: 25 May 1995

(SGD.) FRANCISCO L. VIRAY
Acting Secretary