PSALM pares down liabilities by P29 B to P393 B as of June

Published October 22, 2020, 6:00 AM

by Myrna M. Velasco

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has apprised the Senate Committee on Energy that its liabilities had been trimmed by P29 billion as of June this year to P393.3 billion from a heftier scale of P422 billion as of end-December 2019.

During the budget deliberations for the energy sector, PSALM indicated that of the remaining financial obligations, P261.2 billion would account for debts; while P132.1 billion would represent lease obligations with the independent power producers (IPPs).

The strengthening of the Philippine peso against the greenback contributed to the lowering of PSALM’s financial obligations, because 68-percent of its debts had been denominated in US dollars.

Bulk of the payments funneled on the company’s liabilities had been from proceeds raised from the privatization of the National Power Corporation ‘s (NPC) assets, of which collected amount already reached P624.862 billion as of June 30 this year.

From the total revenues fetched from the divestment of the government’s power assets at P911.981 billion, PSALM said it still has remaining collectibles of P287.119 billion which it can pursue until the end of its corporate life in 2026.

For next year, the state-run company stated that it will be seeking a budget of P182.302 billion; and the bulk of that at P181.929 billion will be earmarked for its maintenance and other operating expenses (MOOE) and will be inclusive of payments to financial obligations falling due.

Of the proposed budget, PSALM said the lion’s share of P174.3 billion shall be coming from internally generated funds; while it is seeking P8.0 billion allocation from the General Appropriations Act (GAA) which will then be utilized as a rate subsidy for consumers under the Murang Kuryente Act.

Relative to the MOOE allotment, PSALM specified that P139.934 billion will be budgeted for settlement of maturing debts and IPP obligations; while expenses for fuel of its remaining power plants will be needing P26.126 billion.

Debts payments, according to the state-owned firm, will include principal, interest and guarantee fees; while IPP lease obligations will cover IPP fixed fees and purchased power costs.

The company has also set P2.115 billion funding allotment for the National Transmission Corporation; while P3.918 billion will be for capital outlay on its existing Operation and Maintenance Agreement (MOA) with NPC.
It has to be noted that NPC still operates some of the un-privatized power assets that had been placed under PSALM’s charge, primarily the 728-megawatt Agus-Pulangui hydropower complex in Mindanao grid.