State-run Power Sector Assets and Liabilities Management Corporation (PSALM) has already collected P653.218 billion, out of the P911.040 billion proceeds that the government fetched from the divestment of National Power Corporation’s power generation and transmission assets.
That level of privatization revenues collection as of end-March this year, will just leave a balance then of P257.822 billion; and it will already be short by roughly P100 billion to fully cover the remaining liabilities of PSALM which had been placed at P357.75 billion as of end-May 2021. The government-owned firm’s corporate life will end in 2026.
PSALM’s liabilities are also expected to swell further because the bulk or about 63-percent of its outstanding financial obligations are denominated in US dollars – and the value of the greenback is now well known to be appreciating substantially versus the Philippine peso.
On the sale proceeds already remitted, P164.069 billion worth of revenues from the privatization of NPC power generation assets had been fully paid, according to PSALM documents.
The asset divestments that still have balances are those on the concession fees of the National Grid Corporation of the Philippines for the privatization of the transmission assets; as well as on the capacity payments of Independent Power Producer Administrators (IPPAs) for the privatized power supply contracts.
For the 25-year concession contract of the transmission facility, P189.091 billion had already been paid, out of the expected P260.543 billion total proceeds; while for the privatized IPP contracts, collection already topped P296.129 billion vis-à-vis total proceeds of P482.499 billion.
Earnings from the decommissioned facilities at P660 million, as well as other NPC divested assets worth P3.269 billion had also been fully settled, as reported by PSALM.
On the remitted revenues, PSALM noted that the total collections as of the first quarter, “were exclusively utilized for the liquidation of financial obligations amounting to P700.94 billion” -- and that was “augmented by interest income on placements and funds from power receivables.”
Most of the asset divestments gained traction during the Arroyo and Aquino administrations; while the only major privatization that happened under the Duterte administration was that of the 650-megawatt Malaya thermal power facility which fetched an offer of P3.123 billion. This deal with Filipino firm buyer Fort Pilar Energy has yet to reach financial closing and turnover.
The current PSALM leadership is also targeting the privatization of the Caliraya-Botocan-Kalayaan (CBK) and Casecnan hydropower plants, but it remains to be seen if this could still advance in the remaining months of the outgoing administration.
The state-run firm previously engaged the assistance of the Asian Development Bank (ADB) to study the best mode of privatization that shall be carried out for the specified hydro assets.