20 Aug 2019
The Power Sector Assets and Liabilities Management Corporation (PSALM) thanks President Rodrigo Duterte for issuing Executive Order No.88, which reduces real property tax (RPT) liabilities of those power generation facilities of independent power producers (IPPs) under Build-Operate-Transfer (BOT) arrangements.
EO No. 88 orders the reduction of real property tax on property, machinery and equipment that these IPPs use to produce electricity. Specifically, it lowers the realty tax to a tax based on an assessment level of 15% of fair market value of the said property, machinery and equipment depreciated at the rate of 2%.
PSALM has in its portfolio five (5) contracts with IPPs that will be covered by EO no. 88. This includes the Ilijan Natural Gas PP, the Pagbilao CFTPP, the Sual CFTPP, the Mindanao Coal CTPP and the San Roque HEPP.
“PSALM will greatly benefit from EO No. 88 because under PSALM’s BOT arrangements, the real property tax is contractually assumed by PSALM. With the issuance of EO No. 88, PSALM anticipates that its RPT payments will be reduced to ?205.5 Million. PSALM will be able to save ?890.5 Million which can then be utilized for the settlement of maturing financial obligations of NPC,” explains PSALM President and Chief Executive Officer, Irene Joy Besido- Garcia.
Strategic Communications and Partnership Division |