PSALM secures P202-M prepayment from Sorsogon electric cooperative

Published January 19, 2021, 8:00 AM

by Myrna M. Velasco

State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has cornered prepayment of P202.106 million from Sorsogon I Electric Cooperative (SORECO I), as part of the restructuring deal that the parties have entered into.

For the amount prepaid by the Sorsogon power utility, it was noted that the loan was accessed from the Development Bank of the Philippines (DBP), a government financing institution.

PSALM President Irene Joy Besido-Garcia

As noted by PSALM President Irene Joy Besido-Garcia, “since SORECO-I entered into restructuring agreement, it religiously paid its monthly amortizations for its obligations and consistently updated its monthly amortizations for deferred accounting adjustment (DAA) charges.”

Given its sustained payments, she explained that SORECO-I already gained the privilege of availing prompt payment discount starting January this year, “if the monthly DAA amortization is paid within the discount period.”

Garcia added that the Sorsogon electric cooperative “is also up-to-date in remitting to PSALM the universal charges it collected from end-users.”

The state-run firm said its restructuring deal with the power utility was firmed up February 27 last year. Under the agreement, SORECO-I was granted amortization payment spanning more than 76 months or until May 2026.

PSALM further noted that the RA “provides a prepayment option for SORECO I to avail of better financing terms and make loan payments easier,” and that was the facility it availed of with the DBP.

The state-owned company has been pursuing billions worth of collections from various power utilities in the country, so it can build up its cash resources that it will then subsequently use for payments of assumed liabilities.

“All payments from power accounts contribute to the reduction of PSALM’s outstanding financial obligations assumed from the National Power Corporation,” the firm said.

The government-run company’s life cycle will only be until June 2026, but it still has more than P393 billion worth of stranded liabilities that it will need to settle fully in the next five years.