Published
By Myrna M. Velasco
Due to swelling foreign
exchange (forex) losses, state-run Power Sector Assets and Liabilities
Management Corporation (PSALM) logged a very dismal financial performance as of
third quarter last year with its bottom line posting deficit of P14.443
billion.
While the company’s
overall operations registered positive income, its financial liabilities for
the period had grown bigger, hence, it still posted gargantuan losses for the period.
Total revenues for the
company had been at P66.596 billion within that three-month period, but
operating expenses reached P60.569 billion – thus leaving the balance at just
P6.026 billion, which was still on a positive notch.
Although the state-run firm’s overall financial gain was P12.801 billion, its
deficit of P32.950 billion showed significant losses in that specific quarter.
Last year had been most
problematic for the state-run firm, especially in managing outstanding debts,
because bulk of such financial obligations had been denominated in US dollars.
On the company’s total
liabilities, it climbed higher to P462.6 billion as of end-September last year,
inching up compared to the time that it was already at P450 billion at the
starting months of 2018.
The falling value of
the Philippine currency versus the greenback had been generally blamed on the
company’s inflating liabilities –mainly because 73.5 percent of its debts are
in US dollars.
“In terms of currency,
74 percent of PSALM’s debt is denominated in dollars, amounting to P339.99
billion,” the state-run company has emphasized.
Conversely, its peso-denominated loans amounted to P93.07 billion and that
account for 20 percent of its total debts; while the balance are in Japanese
yen for P29.52 billion or about 6.0 percent of the total pie.
Liability management
remains a very tough challenge for PSALM, prompting the national government to
absorb its remaining financial liabilities – including those on its stranded
debts and stranded contract costs.
The legislative pathway
being proposed is to utilize the Malampaya fund to totally wipe put the
financial liabilities of PSALM – and that in turn, will free up consumers from
continually paying the universal charges for stranded debts and stranded contract
costs being added line items in their electric bills.
The measure is
currently under deliberations in Congress, but mammoth questions are being
raised because by the very nature of it, the Malampaya fund is virtually at
“zero-cash state” and the national government may need to tap new loans just to
have it replenished.
If that will be the remedy, then consumers may eventually be burdened anew with
higher taxes just to pay off planned fresh round of state borrowings.
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