PSALM extension hurdles Senate
By Butch Fernandez – January 22, 2025
from Business Mirror
The Senate approved on third and final reading Senate Bill (SB) 2837, which extends the corporate term of the Power Sector Assets and Liabilities Management Corp. (PSALM).
The bill will amend section 50 of Republic Act 9136, otherwise known as the Electric Power Industry Reform Act (Epira) of 2001.
Under the bill, the PSALM will continue to exist for a period of five years from the expiration of its original term on June 26, 2026.
Through Epira, PSALM was entrusted to formulate and implement a privatization plan for the government’s energy assets previously held by the National Power Corp. (NPC). It was also mandated to manage the orderly sale, disposition, and privatization of these assets with the objective of liquidating all NPC financial obligations and stranded contract costs.
The bill’s sponsor and principal author, Senator Mark Villar thanked the chamber for its support on the bill’s passing.
“Mr. President, through this bill, we will provide PSALM five more years to give them sufficient time to settle existing obligations. This will also enable PSALM to commence asset and management plans for several significant Independent Power Producer (IPP) facilities and real estate assets,” he said.
“I would like to extend my gratitude to our colleagues who helped craft this bill— Deputy Majority Leader Senator JV Ejercito, Senator Raffy Tulfo, and Senator Pia Cayetano. I would also like to thank our Minority Leader Senator Koko Pimentel and Senator Win Gatchalian, for sharing their wealth of wisdom in further enhancing this bill.”
The PSALM was created in 2001 through Epira, which was essentially enacted to restructure the power sector previously monopolized by NPC. It was entrusted to formulate and implement a privatization plan for the government’s energy assets previously held by the NPC.
The corporation also took over the ownership of all existing NPC generation assets, liabilities, Independent Power Producers (IPP) contracts, real estate, and all other disposable assets. And it is also mandated to manage the orderly sale, disposition, and privatization of these assets with the objective of liquidating all NPC financial obligations and stranded contract costs.
“PSALM’S wealth of experience and knowledge gained throughout its 22 years of existence serves to operationalize the policies and provisions enshrined in the Epira,” Villar said in his sponsorship speech. According to Villar, as of December 2023, PSALM substantially reduced its financial obligations by 76 percent or from P1.2 trillion to P294 billion. PSALM likewise remitted to the Bureau of Treasury around P26 billion as dividends to the national government.
