PSALM logs P14-billion losses as of Q3
By Myrna M. Velasco – February 3, 2019, 10:00 PM
from Manila Bulletin
Due to swelling foreign exchange (forex) losses, state-run Power Sector Assets and Liabilities Management Corporation (PSALM) logged a very dismal financial performance as of third quarter last year with its bottom line posting deficit of P14.443 billion.
While the company’s overall operations registered positive income, its financial liabilities for the period had grown bigger, hence, it still posted gargantuan losses for the period.
Total revenues for the company had been at P66.596 billion within that three-month period, but operating expenses reached P60.569 billion – thus leaving the balance at just P6.026 billion, which was still on a positive notch.
Although the state-run firm’s overall financial gain was P12.801 billion, its deficit of P32.950 billion showed significant losses in that specific quarter.
Last year had been most problematic for the state-run firm, especially in managing outstanding debts, because bulk of such financial obligations had been denominated in US dollars.
On the company’s total liabilities, it climbed higher to P462.6 billion as of end-September last year, inching up compared to the time that it was already at P450 billion at the starting months of 2018.
The falling value of the Philippine currency versus the greenback had been generally blamed on the company’s inflating liabilities –mainly because 73.5 percent of its debts are in US dollars.
“In terms of currency, 74 percent of PSALM’s debt is denominated in dollars, amounting to P339.99 billion,” the state-run company has emphasized.
Conversely, its peso-denominated loans amounted to P93.07 billion and that account for 20 percent of its total debts; while the balance are in Japanese yen for P29.52 billion or about 6.0 percent of the total pie.
Liability management remains a very tough challenge for PSALM, prompting the national government to absorb its remaining financial liabilities – including those on its stranded debts and stranded contract costs.
The legislative pathway being proposed is to utilize the Malampaya fund to totally wipe put the financial liabilities of PSALM – and that in turn, will free up consumers from continually paying the universal charges for stranded debts and stranded contract costs being added line items in their electric bills.
The measure is currently under deliberations in Congress, but mammoth questions are being raised because by the very nature of it, the Malampaya fund is virtually at “zero-cash state” and the national government may need to tap new loans just to have it replenished.
If that will be the remedy, then consumers may eventually be burdened anew with higher taxes just to pay off planned fresh round of state borrowings.
