02 Aug 2018
The Power Sector Assets and Liabilities Management Corporation (PSALM) is not passing blame on the Energy Regulatory Commission (ERC) for its liabilities, contrary to the press release issued by the National Association of General Managers of Electric Cooperative (NAGMEC).
PSALM was asked to submit some data to the Senate on 30 July 2018, relative to Senate Bill No.924, which proposed the use of Malampaya funds to settle liabilities of PSALM. PSALM merely complied with the instructions of Senator Sherwin T. Gatchalian, Senate Energy Committee chair, to report the cost of borrowings that PSALM shoulders while awaiting approval on its current petitions for the stranded cost (SCC) and stranded debt (SD) portions of the Universal Charge. During the Senate hearing, PSALM did not say that it is blaming ERC for its liabilities.
“The computation of PSALM simply presents the cost of contracting loans to supplement the needed funds to pay maturing debts while awaiting approvals of its UC-SCC and SD applications filed with the ERC,” PSALM President and Chief Executive Officer, Irene Joy Besido-Garcia, said.
PSALM also clarified that it is not accurate to state that it has “ballooning debts”. Total liabilities that PSALM assumed from NPC reached PHP1.24 trillion in 2003. As of 30 June 2018, the remaining principal debt of PSALM is PHP246.73 billion, while the remaining obligations under its Independent Power Producer contracts amount to PHP202.70 Billion. PSALM has successfully reduced the financial obligations to PHP449.4 billion or equivalent to 64.35% reduction.
“PSALM adheres to full transparency. Its records show that privatization proceeds are utilized to pay its financial obligations. The Commission on Audit validates PSALM’s books,” Garcia added.
It is not true that PSALM is not privatizing its assets. PSALM has already generated privatization proceeds from assets amounting to PHP918.50 billion. Of this amount, PSALM has already collected PHP545.20 billion, while the balance is based on a payment schedule.
PSALM is entirely committed to fulfilling its mandate of privatizing its remaining assets. Its recent accomplishments include the privatization of over 900 hectares of real estate power assets, the Power Barge 104 and the sale of the decommissioned Sucat Thermal Power Plant. This August, it begins the privatization process of the Manila Thermal Power Plant underlying lands (not the power plant as earlier mentioned). Before the end of 2018, the privatization of the Malaya Thermal Power Plant shall likewise commence.
Strategic Communications and Partnership Division |