PSALM pared liabilities by P40.1 billion in 2020

Published January 21, 2021, 7:00 AM

by Myrna M. Velasco

The outstanding financial obligations of state-run Power Sector Assets and Liabilities Management Corporation (PSALM) had been pared by a substantial P40.103 billion in 2020 to P381.908 billion from a humongous level of P422.01 billion the previous year.

The government run firm similarly noted that it paid all interests and borrowing costs that had fallen due last year – and that amounted to P11.56 billion.

“PSALM was able to lower its average interest rate in borrowings from the average of 5.07-percent per annum at the end of 2019 to 4.17-percent per annum at the end of 2020,” the company stated in its report of accomplishments furnished to the media.

The asset-seller firm similarly highlighted that it “successfully collected deferred privatization proceeds amounting to P38.656 billion,” and such comprised of payments remitted by Independent Power Producer Administrators (IPPAs); and the concession fee payments of the National Grid Corporation of the Philippines.

The IPPAs are the private-firm takers of the privatized power supply agreements (PSAs) and energy conversion agreements (ECAs) of the IPP contracts originally underwritten by state-run National Power Corporation (NPC), but was eventually transferred to PSALM as part of the overall restructuring of the power industry.

In the privatization of the transmission facility, private firm concessionaire NGCP remits concession fee payments semi-annually or at least two tranches in a year.

On the total outstanding financial obligations of PSALM, this is predominantly denominated in US dollars (at 67.5-percent), hence, the stronger value of the Philippine peso versus the greenback last year, helped trim the firm’s overall liabilities.

The state-owned company’s other financial dues are in Japanese yen for 7.3-percent; while 25.3-percent are in the local currency.

Part of the financial shoring up achieved by PSALM last year had been improvement on collections, including for accounts that have delinquencies or have already been overdue in their payments.

“PSALM was able to achieve collection efficiency rate of 93.94-percent for power sales equivalent to P12.895 billion from its power customers,” the company stated.

And on collections from delinquent and overdue accounts, the government-run firm reported that it fetched additional collection of P2.607 billion last year.

On the operations’ facet of the company, PSALM emphasized that it was able to “keep overhead expenses low –achieving a mere 4.23-percent share of overhead expenses to its total income.”

PSALM is continuing the privatization of power as well as real estate assets that had been transferred into its charge; and it has been maximizing proceeds from these divestments so it can raise more money to settle remaining financial obligations.

To generate heftier income, the company similarly indicated that it entered into short-term lease agreements with government offices for certain assets that are not yet scheduled for privatization.