PSALM pares down debt to P417.88B
By Lenie Lectura -April 6, 2020
from Business Mirror
The Power Sector Assets and Liabilities Management Corp. (PSALM) has reduced its principal financial obligations to P417.88 billion last February, from P422.011 billion recorded at the end of 2019.
PSALM President Irene Joy Besido-Garcia, in a text message, said the state firm’s total principal financial obligation as of February 28, 2020, is P417.88 billion. This amount consists of debts, P273.32 billion; and IPP (Independent Power Producer) lease, P144.56 billion.
At end-2019, PSALM reported that its financial obligations were cut by P27.18 billion to P422.011 billion.
PSALM is the entity created by the Epira, the law that restructured the power industry by privatizing the assets of the National Power Corp. (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 (ECs) with the National Electrification Administration assumed by PSALM.
Funds in settling PSALM’s assumed financial obligations are sourced from collections from its power generation, privatization proceeds and universal charge (UC).
PSALM has successfully adopted new disposal modes and simplified the public bidding procedures to attract more bidders. It also entered into short-term lease agreements over certain assets that are not yet scheduled for privatization in order to raise revenues.
For this year, Garcia said among PSALM’s goals is the liquidation of its maturing financial obligations with a target net reduction amounting to P11.943 billion.
“Despite all the challenges created by the Covid-19 (coronavirus disease 2019) situation and the enhanced community quarantine, PSALM is still able to remit payments not only for the principal financial obligations, but also for the interests, the borrowing costs as well as all other payables of PSALM,” said Garcia.
From P449.19 billion in 2018, PSALM cut its principal financial obligations to P422.011 billion in 2019, down by 6.05 percent or P27.18 billion, an improvement over the firm’s original target of slashing its debt by P15.21 billion.
Other plans of PSALM for the year include the privatization of the Malaya Thermal Power Plant (TPP) in Pililia, Rizal and to start the privatization activities for the Caliraya-Botocan-Kalayaan Hydroelectric Power Complex in Kalayaan, Laguna.
PSALM is also targeting to maintain its 93-percent collection efficiency on current power sales by collecting P10.47 billion this year and another P754 million from delinquent and overdue accounts, Garcia said.
Through the efficient administration of the UCs, Garcia said PSALM is also aiming to collect P30.59 billion this year, equivalent to a collection efficiency of 98 percent.
