PSALM’s total liabilities remain huge

Published December 29, 2017, 10:01 PM By Myrna M. Velasco

https://business.mb.com.ph/2017/12/29/psalms-total-liabilities-remain-huge/

The total liabilities of state-run Power Sector Assets and Liabilities Management Corporation had still been at whopping P754.118 billion, as could be gleaned from its latest financial statement.

That accounted for its current liabilities of P190.046 billion and P564.072 billion of non-current liabilities that shall include its build-operate-transfer (BOT) lease obligations, accounts payable and accrued expenses, long-term liabilities and deferred collection of universal charges.

Offset that with the company’s current assets of P806.034 billion, and the net is just P51.915 billion, which is not a very promising prospect for a company that is about to wind up its corporate life in 2026 and with many of its asset divestment efforts teetering into breaking points, primarily its privatization of power supply contracts.

As of end-September this year, PSALM posted a net loss of P4.345 billion, mainly due to its colossal foreign exchange (forex) losses hitting P4.399 billion within the financial period in review.

The company similarly reported gargantuan interest expense costs and financial charges to the tune of P14.758 billion for July-September this year. That practically wiped out the P15.103 billion income from operations that the company logged within the same period.

Based on its financial statement, PSALM’s receivables from independent power producer administrators (IPPAs) of its privatized power supply contracts remained staggering at P268.464 billion long-term; and net power receivables at P18.610 billion.

The company also booked concession fee receivables from the privatization of the National Transmission Corporation (TransCo) at P218.270 billion.

For the pass-on to consumers, which are the collections of universal charges (UC) in the electric bills, deferred receivables were placed at P6.439 billion for UC on stranded contract costs (SCC) and P22.844 billion on UC for stranded debts.

PSALM also listed P47.266 billion of costs due to government-owned and controlled corporations (GOCCs) and government agencies.

The state-owned firm has targeted divestments of the remaining power assets of the National Power Corporation, primarily the hydropower facilities, but it had not really gained success this 2017.

It has been the wish of its current board chairman, Finance Secretary Carlos Dominguez III, to clear up PSALM’s financial woes prior to the end of its corporate life in the next eight years, but prospects are far from buoyant at this point.

Even the use of the Malampaya fund, purposively to retire the stranded liabilities of PSALM, still runs into hurdles chiefly at the required legislative action on the proposal.