PSALM debt shrinks despite pandemic

By Lenie Lectura – October 21, 2020
from Business Mirror

The Power Sector Assets and Liabilities Management Corp. (PSALM) has trimmed its financial obligations to P393.3 billion in the January-to-June period from P422 billion at end-2019.

PSALM President and Chief Executive Officer Irene Joy Besido-Garcia said during the Senate budget hearing the other day that the state firm was able to reduce its debt by 68.3 percent amounting to P847.3 billion from the peak of P1.24 trillion in 2003.

“As of June 2020, it is now down to P393.3 billion. This consists of debts amounting to P261.2 billion and IPP (Independent Power Producer) lease obligations of P132.1 billion,” said Garcia.

PSALM said it had sufficient funds to pay all its maturing obligations even those that fell due during the enhanced community quarantine (ECQ). It said its liquidity was mainly because of its efficient performance in 2019 and in the early months of 2020, and notwithstanding the deferment of substantial revenue collections during the ECQ as ordered by the Energy Regulatory Commission and the Department of Energy on Covid-19.

“In terms of actual collection, we have P624.862 billion in actual collection from the various assets that we have privatized. For 2019, we collected P39.578 billion. In the first semester of the year, we collected P19.489 billion notwithstanding the pandemic,” added Garcia.

PSALM has been paying its maturing debts and IPP obligations, including interest and other charges, despite the ECQ and the deferment of revenue collections from power bills, certain IPPA payments and the Universal Charge. The state firm is also experiencing financial setbacks caused by Covid-19 and the ECQ, but Garcia said PSALM will not default on any of its maturing obligations assumed from the National Power Corp.

“We will continue to work with the privatization of the remaining assets,” she said.

Among the state firm’s assets that have yet to be privatized include the Malaya thermal power plant, CBK-Hydroelectric Power Plant and Casecnan multi-purpose hydropower plant. PSALM hopes to sell the Malaya plant this year and the two hydro power facilities by 2021 or 2022.