By Myrna M. Velasco
State-run Power Sector Assets and Liabilities Management Corporation (PSALM) will be borrowing ₱43 billion from the Development Bank of the Philippines (DBP), which it will use to settle maturing obligations for the rest of the year.
“PSALM has already obtained the approval from the Department of Finance (DOF) to implement the first drawdown from the said loan by June 2020,” the company has noted in a statement to the media.
The government-owned firm said this new round of borrowings would be necessary because its anticipated revenues “will not be sufficient to cover all maturing obligations and operating expenses for the rest of 2020.”
Cash stream for the company are from privatization proceeds, power sales, collections from delinquent and overdue accounts as well as the remaining proceeds to be fetched via the pass-on of universal charge (UC) for stranded debts.
PSALM President and CEO Irene Joy B. Garcia said the company “has been paying its maturing debts and IPP (independent power producer) obligations, including interest and other charges despite the ECQ (enhanced community quarantine) and the deferment of collections from power bills, certain IPPA payments and the universal charge.”
She qualified there had been “serious financial setbacks caused by COVID-19 and the ECQ, but PSALM will not default on any of its maturing obligations.”
The only silver lining that the company was able to latch on recently was the ₱17.7-billion reduction on its remaining financial obligations, as reckoned for the second quarter of this year.
So far, the firm’s outstanding liabilities had been trimmed to ₱404.28 billion as of mid-May this year; and that was from ₱422.01 billion in January.