PSALM debt payments reached ₱108.12 billion in 2019

Published March 2, 2020, 10:00 PM By MYRNA M. VELASCO

https://business.mb.com.ph/2020/03/02/psalm-debt-payments-reached-%E2%82%B1108-12-billion-in-2019/

The financial obligation payments of state-run Power Sector Assets and Liabilities Management Corporation (PSALM) reached ₱108.119 billion last year, including principal debt and interest charges, according to the company’s top executive.

PSALM President and CEO Irene Joy B. Garcia said principal debt payments in 2019 hovered at ₱60.014 billion; while interest and other charges amounted to ₱19.236 billion.

She detailed that interest expenses of the company summed up to as much as ₱17.5 billion; while other charges totaled ₱1.7 billion, roping in guarantee fees, monitoring fees and taxes on interest payments.

Additionally, Garcia noted the state-run firm spent ₱28.869 billion for its lease obligation payments on assumed contracts with the independent power producers (IPPs).

The IPP contracts had been part of the assets and liabilities transferred to its charge following the privatization exercise enforced upon the National Power Corporation (NPC) as prescribed under the Electric Power Industry Reform Act.

The primary mandate vested upon PSALM is to divest NPC’s power assets and contracts; and from the proceeds of such privatization, it shall be able to liquidate the remaining liabilities of the power firm.

With its remaining six-year corporate life, the company said it will be working harder on advancing the privatization of remaining power assets: such as the Malaya thermal plant which it will be placing on the auction block next month; the targeted privatization of the Casecnan and Caliraya-Botocan-Kalayaan (CBK) hydropower facilities; then the IPP contract of the Mindanao coal-fired power plant.

It is a conscious decision of the government to defer the privatization of the Agus-Pulangui hydropower complex in Mindanao – and divestment may just be decided upon after the completion of overhaul and rehabilitation works on the assets.

On liability management, PSALM is currently chasing various distribution utility-clients and other customers on arrears that already hit colossal ₱95 billion, so it can raise additional cash to settle maturing obligations.

For the various distribution utilities and electric cooperatives, the company is going after ₱35 billion worth of receivables – the heftiest amounts of which are with Lanao del Sur Electric Cooperative at ₱10.512 billion; the Public Utilities Department of Olongapo for ₱6.459 billion; PICOP Resources Inc. at ₱3.107 billion; Albay Electric Cooperative Inc. for ₱2.810 billion; and Maguindanao Electric Cooperative Inc. for ₱2.129 billion.

The company is also running after the unpaid obligations of several IPP clients and commercial-industrial customers, albeit some of these are currently under litigation proceedings.