PSALM Cleans Up 'Doubtful' Accounts

Manila Bulletin
March 4, 2012, 11:41pm


MANILA, Philippines — The Power Sector Assets and Liabilities Management Corporation (PSALM) indicated that it has already taken steps to “clean up” its books of the “doubtful entries” cited by the Commission on Audit (COA) primarily on its 2010 financial records.


This, as the company qualified that it has not included any of those questionable accounts in its P140 billion worth of cost recoveries under its application for universal charges (UC) on stranded debts and stranded contract costs.


“Cognizant of the COA’s recommendations to reconcile and validate NPC’s (National Power Corporation) doubtful accounts, PSALM created in October 2011 a joint task force on the cleaning of accounts retained at NPC/transferred to PSALM and the National Transmission Corp. The task force members came from PSALM, NPC and TransCo,” the company has noted in a statement in response to a Manila Bulletin article.


The company emphasized that some doubtful accounts amounting to more than P40 billion had not been inputted in its UC application. These represent P2.873 billion receivables; P11.048 billion due from government agencies; P9.930 billion due to government-owned and controlled corporations (GOCCs) and national government agencies (NGAs); P8.675 billion other receivables; P1.231 billion accounts payable; P979 million accrued expenses; and P5.446 billion other expenses.


The statement of PSALM on “the clean-up process” on its books as well as the supposed non-inclusion of the questioned costs on its UC applications, however, cannot be categorically supported by sources from COA and the other energy entities involved in the process.


Sources from both TransCo and NPC indicated that “the clean-up and reconciliation of PSALM’s books and records are still not completed.” They averred that the major question that PSALM must answer at this point would be: “are the documents it submitted to the ERC for its UC applications consistent with the COA audit report?”


In a text message, PSALM president Emmanuel R. Ledesma Jr. admitted that “COA is not expected to issue a categorical statement as to whether doubtful accounts formed part of the UC application.” It must be noted that PSALM filed its UC application June 2011; while the “cleaning up” of its books as recommended by COA was just implemented October 2011.


Stakeholders in the power industry have been urging the Energy Regulatory Commission (ERC) then to carefully scrutinize PSALM’s books and financial records before approving its UC filings; most especially because the bloat in the company’s liabilities had not been provided “acceptable explanation” until now. (MMV)