By Myrna M. Velasco
State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has programmed to borrow ₱43 billion next year to partly bankroll its operating expenses and manage liabilities that are already due for settlements.
PSALM President Irene Joy Garcia said the extent of borrowings for year 2020 had been trimmed compared to what was originally targeted at ₱60 billion because the company’s liabilities had been reduced to more significant level versus initial projections.
“PSALM has successfully reduced the outstanding financial obligations of the National Power Corporation by ₱33.2 billion this year,” the company chief executive said.
She qualified that by end-2018, PSALM liabilities had been hovering at ₱449.2 billion, but that was already reduced to ₱416 billion as of end-October this year. “We can still lower it more by the end of this year,” she stressed.
With the leaner liabilities of the company, Garcia expounded that one positive consequence of that is lower borrowings for the state-run firm next year to cover shortfalls on maturing obligations.
She nevertheless emphasized that the ₱43-billion targeted loan procurement will not include yet the amount to be funneled for rate reduction under the Murang Kuryente Act – because that borrowing will have to be transferred eventually to the national government through the budgetary process coverage of the Department of Budget and Management.
PSALM has been pursuing various asset privatization activities this year, but it has not done much on the disposal of the big-ticket assets – primarily the remaining power generating facilities of NPC.
So far, the company fetched additional proceeds from divestment of several real estate assets, but these are considerably marginal compared to the scale of liabilities yet to be disposed.