Published February 22, 2017, 12:05 AM By Myrna M. Velasco
With other expected fund sources not bursting forth, the Power Sector Assets and Liabilities Management Corporation (PSALM) had been given go-signal in the interim to procure loans of up to P30 billion.
As disclosed by Finance Secretary and PSALM Board Chairman Carlos G. Dominguez III, “we didn’t have any choice, so we had to allow borrowings for them… for P30 billion,” further noting the urgency for the company to settle maturing debts – especially those with required bullet payments.
The finance chief earlier told PSALM that he is not inclined on to fresh round of borrowings that the company will be engaging in, but he qualified that since there are debt maturities, he had to give in for the time being.
PSALM Officer-in-Charge Lourdes S. Alzona noted that they already settled the initial P17 billion bullet payment due this first quarter.
After that first round of debt lapse, the next payments shall be P31 billion next year; and the gigantic P50 billion in 2019, which is of another bullet debt payment schedule.
For the P31 billion falling due in 2018, PSALM noted that it would be a combination of regular loan amortization and other bullet payments.
The borrowings expiring in 2019, on the other, had been from the global bonds issued by PSALM in 2009 – which was also utilized then to pay off debts as well as bankroll its corporate cash needs.
With the delays of the privatization of assets, the company heavily resorted to loan procurements to continually honor its financial obligations. Such, however, further swelled the residual liabilities of the state-owned firm.
PSALM targeted to raise the funds for its debt settlements via pass-on of stranded debt recoveries in the universal charge (UC) item in the electric bills, but regulatory approval processes have been taking time.
The company’s pending applications for universal charges on stranded debts totaled P70.12 billion covering the periods from 2011 to 2015. The breakdown would be as follows: P28.4 billion for 2011; P12.7 billion for 2012; P1.35 billion for 2014; and P27.67 billion for 2015.