PSALM cuts 2019 debts by P15.2 billion, collects P98.4 billion
By Bernadette D. Nicolas -March 11, 2020
from Business Mirror
THE Power Sector Assets and Liabilities Management Corp. (PSALM) slashed its debts by 6.05 percent to P27.18 billion in 2019, bringing the outstanding principal financial obligations to P422.011 billion last year, from P449.19 billion in 2018.
Not only did PSALM exceed its original target to slash its debt by P15.211 billion last year, it also collected P98.37 billion in revenues and receivables in 2019 on the back of efficient implementation of its liability management strategies.
PSALM is the entity created by the Electric Power Industry Reform Act (Epira), which restructured the power industry by privatizing the assets of NPC. The obligation transferred to PSALM was at a high of P1.24 trillion. This is on top of the P16-billion loans of electric cooperatives with the National Electrification Administration that were assumed by PSALM.
In a report to Finance Secretary and PSALM Chairman Carlos G. Dominguez III, PSALM President Irene Joy Besido-Garcia said the revenues and receivables came from privatization proceeds, power sales, collections from delinquent and overdue accounts and proceeds from the universal charges (UC).
The state-owned firm also recorded a 93.5-percent collection efficiency in 2019 for current power sales, enabling the firm to collect P11.76 billion from its power customers.
Garcia said PSALM collected P4.32 billion in overdue and delinquent accounts by offering borrowers flexible payment schemes through restructuring agreements or special payment agreements, leading the state-owned firm to surpass its target of P4.12 billion.
“These flexible payment schemes encouraged entities and electric cooperatives to viably settle their outstanding obligations,” she said in the report.
Privatization
Meanwhile, collections from privatization initiatives amounted to P74.66 billion while proceeds from the UC for Stranded Contract Costs and UC for Stranded Debt brought in another P7.63 billion for the firm in 2019.
PSALM’s overhead expenses were also drastically reduced to just 4.67 percent of the total income, equivalent to nearly twice its goal of 8.92 percent.
Moreover, PSALM also achieved an ever better Earnings Before Interest, Taxes, Depreciation and Amortization margin of its remaining power assets last year at 14.07 percent, significantly higher than its target of 4.88-percent Ebitda margin. The firm also posted a 98.07-percent collection efficiency as PSALM’s collections on UC remittances reached P20.115 billion out of the total P20.51 billion in receivables.
All of PSALM’s proceeds from the UC-Missionary Electrification Charge to the National Power Corp.’s Small Power Utilities disbursed by the firm amounted to P13.241 billion, while those from renewable-energy developers reached P18 million.
For this year, Garcia said PSALM aims to liquidate its maturing financial obligations with a target net reduction of P11.943 billion.
Aside from this, PSALM also wants to privatize the Malaya Thermal Power Plant in Pililla, Rizal, as well as to start its privatization activities for the Caliraya-Botocan-Kalayaan Hydroelectric Power Complex in Kalayaan, Laguna.
To maintain a 93-percent collection efficiency, PSALM targets to collect P10.47 billion on current power sales this year and another P754 million from delinquent and overdue accounts.
Garcia also said PSALM’s collection goal for this year is P30.59 billion through the efficient administration of UCs, equivalent to a collection efficiency of 98 percent.
“PSALM will also diligently comply with the implementing rules and regulations [IRR] of the Murang Kuryente Act, once they are promulgated, including the submission of requirements to oversight agencies to ensure adequate annual allocation from the P208-billion Malampaya Fund for stranded contract costs and stranded debts, including anticipated shortfalls,” Garcia said.
A total of 81 lots with a total combined area of over 1 million square meters will be disposed by the firm this year under its Strategic Plan approved by the PSALM Board.
PSALM will also fully implement its Restructuring Plan as approved by the Governance Commission for Government-Owned and -Controlled Corporations and strive to successfully litigate its pending cases in court this year.
