House of Representatives (Ellson Quismorio/ MANILA BULLETIN)

Olongapo City Mayor Rolen Paulino Jr. has told congressmen that the city government cannot, and will not, pay its rather enormous P7.33-billion debt to the National Power Corporation (Napocor) and Power Sector Assets and Liabilities Management Corporation (PSALM).

Paulino justified the city government’s decision during a recent technical working group (TWG) meeting of the Committee on Energy in the House of Representatives.

Tackled during the meeting was House Bill (HB) No.7001, which seeks the condonation of all unpaid debts, including interest payments, value-added taxes (VAT), and other charges on power bills that the Public Utilities Department (PUD) - Olongapo City owes Napocor and PSALM.

"Hindi na po namin talaga mababayaran po yan at wala po kaming planong bayaran (We really cannot pay that and we don't have plans to pay it)," Paulino told the House panel chaired by Marinduque lone district Rep. and former House Speaker Lord Allan Velasco.

"Kasi kada piso po na ibibigay namin sa PSALM para dito sa utang na wala naman po dapat, piso po 'yong nalalayo sa mga eskwelahan natin, na nalalayo sa ospital natin, na nalalayo po sa mga infrastructure na kailangang kailangan natin (It's because for every peso that we pay to PSALM for this debt that we shouldn't even have, we lose this peso from our schools, our hospitals, and from our much-needed infrastructure)," he said.

Paulino also said that the local government unit's (LGU) current budget is P2 billion, or nearly a quarter of the debt. This makes the settlement of the debt impossible.

Zambales 1st district Rep. Jefferson Khonghun agreed with the mayor's stance, saying that it was unacceptable to settle an obligation that supposedly resulted from the mismanagement of the previous Olongapo City local government.

Khonghun, a vice chairman of the energy panel, authored HB No.7001.

NPC and PSALM expressed support for the measure. However, Department of Finance (DOF) Privatization and Corporate Affairs Group (PCAG) Director Joanna Castillo said the department cannot allow the proposed condonation, as it would set a bad precedent for other companies.

The TWG meeting was suspended to allow DOF to prepare and submit a position paper on the matter.