By Myrna M. Velasco
State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has earmarked a humongous corporate operating budget of P184.967 billion this year so it can settle maturing financial obligations and for it to continually manage the remaining power assets under its charge.
Of the amount approved by the PSALM Board, P180.052 billion will be funneled to the regular operational needs of the company; while P4.533 billion had been allocated to National Power Corporation (NPC) based on the terms of their existing Operations and Maintenance Agreement (OMA) covering some primary assets like the Agus-Pulangui hydropower facility in Mindanao and several power barges.
The OMA between the two state-owned companies was signed in 2015 and that warrants NPC to “operate, maintain and manage PSALM’s remaining power plants and appurtenant assets as well as other facilities.”
The capital outlay portion in PSALM’s overall budget had been considerably dwarfed at just P31.033 million; while expenses for personnel services had been set at P350.226 million, according to company documents.
PSALM President Irene Joy B. Garcia previously indicated that one of the big-items the state-run firm would need to settle this year is a bullet loan maturity amounting to US$1.1 billion; plus P31 billion more worth of regular amortization on other outstanding financial obligations. These two items alone will entail corporate spending of P87 billion.
PSALM is still heavily debt-ridden, with its total liabilities hovering at colossal P449.19 billion as of end last year – accounting for both the transferred loans of NPC as well as the remaining obligations with the independent power producer (IPP) contracts.
On top of these debt settlements, PSALM is also in charge of fuel procurement of several power assets – including the Malaya thermal power plant; and for the Ilijan plant when it needs to shift fuel use to diesel during production platform maintenance at the Malampaya gas field.
In a Charter Statement and Strategy Map that the company has submitted this year to PSALM Board Chairman and Finance Secretary Carlos G. Dominguez III, the state-run firm has specified targeted asset divestments and “debt reduction action plans” so it can improve its overall financial stature.
Among PSALM’s committed targets this year would be to pare the scale of delinquent accounts to P4.12 billion from last year’s P15 billion; in addition to improving collection efficiency on current power sales at least to the level of 93-percent.
On continued privatization of power assets, PSALM has calendared the divestment of the 650-megawatt Malaya thermal power plant; and is likewise eyeing to put the 797.92MW Caliraya-Botocan-Kalayaan (CBK) hydropower complex at the auction block.
For real estate assets, in its divestment plans are the sites of the Malaya power plant; Bauang power facility; General Santos diesel plant; Aplaya and Cebu plants and a host of other properties especially those that are ideal for tourism or mixed use commercial developments.
With anticipated proceeds from the sale of remaining assets as well as improved collection efficiency including those on universal charges, PSALM indicated that it could be “debt-free” by the end of its corporate life in 2026.
In fact, in the redevelopment blueprint it has been casting for the NPC complex in Quezon City, PSALM is envisioning that it could still transfer a revenue-fetching venture to the national government at the conclusion of its corporate existence which is just seven years away .