Statement of PSALM President Nieves L. Osorio in response to the statement released on 05 October 2006 by the Philippine Electricity Market Corporation (PEMC) to investigate PSALM for allegedly manipulating electricity prices in the WESM

05 Oct 2006

In the interest of transparency, we welcome the investigation in order to clarify issues raised against our traders. Under the Wholesale Electricity Spot Market (WESM) rules, any complaint must be investigated by PEMC. As far as we are concerned PSALM"s electricity trading teams have been trading electricity based on the rules laid out by PEMC.

Bid prices are influenced by several factors, among them the cost of producing electricity which varies from plant to plant.

There have been no concerted and deliberate efforts to manipulate electricity prices on the part of PSALM's four trading teams.

PSALM, in the conduct of its mandate and responsibilities, is guided by the principles of transparency, integrity and the observance of laws.