Danessa Rivera (The Philippine Star)
- August 22, 2019 - 12:00am
MANILA, Philippines — State-run
Power Sector Assets and Liabilities Management Corp. (PSALM) expects to
generate nearly P1 billion in savings after President Duterte issued the
real property tax breaks (RPT) to power producers.
In a statement, PSALM welcomed
Executive Order 88 signed by President Duterte, which reduces RPT liabilities
of the power generation facilities of independent power producers (IPPs) under
build-operate-transfer (BOT) arrangements.
PSALM president and chief executive
officer Irene Joy Besido-Garcia said the agency would greatly benefit from the
EO “because under PSALM’s BOT arrangements, the real property tax is
contractually assumed by PSALM.”
“With the issuance of EO 88, PSALM
anticipates that its RPT payments will be reduced to P205.5 million. PSALM will
be able to save P890.5 million which can then be utilized for the settlement of
maturing financial obligations of (National Power Corp.),” she said.
EO 88 orders the reduction of RPT on
property, machinery and equipment that these IPPs use to produce electricity.
Specifically, it lowers the realty
tax to a tax based on an assessment level of 15 percent of fair market value of
the said property, machinery and equipment depreciated at the rate of two
`percent.
PSALM has five contracts in its
portfolio with IPPs that will be covered by EO 88. These include the Ilijan
natural gas power plant, the Pagbilao coal-fired thermal power plant, the Sual
coal-fired thermal power plant, the Mindanao coal thermal power plant and the
San Roque hydro electric power plant.
He invoked public interest in
ordering the condonation or the reduction of the RPTs and interest for any year
in any province, or city, or municipalities within Metro Manila.
PSALM is the agency mandated by
Electric Power Industry Reform Act (EPIRA) of 2001 to handle the sale of the
remaining state-power assets and the financial obligations of Napocor. It
has seven years left in its corporate life ending in
2026.
It reduces debts through the
privatization of government-owned assets, collection of the proceeds and its
effective implementation of its liability management program.
Since it was started, PSALM has
privatized 31 generation assets, including the Magat hydroelectric power Plant,
Tiwi-Makban geothermal power plants, Pantabangan-Masiway hydroelectric power
plant, Masinloc coal-fired thermal power plant and Batangas (Calaca) coal-fired
thermal.
Its remaining generating assets
include the Malaya thermal power plant in Rizal, the Agus I, II, IV to VII and
Pulangi hydroelectric power plants in Mindanao, the Mindanao coal-fired power
plant and some real estate properties.
As of the end of May, the state-run
firm still had P433.7-billion remaining payables.
PSALM has seven years left in its
corporate life ending in 2026.
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