PSALM trims debt to P357.7 billion as of May

MANILA, Philippines — State-run Power Sector Assets and Liabilities Management Corp. (PSALM) has reduced its debts to P357.75 billion as of end-May this year.

This represents a decline of P24.16 billion as the agency started the year with total obligations of P381.91 billion.

Of the total financial obligations, outstanding debts amounted to P255 billion, while independent power producer (IPP) lease obligations were at P102.75 billion, PSALM president and CEO Irene Besido-Garcia said.

PSALM reduces debts through the privatization of government-owned assets, collection of the proceeds and its effective implementation of its liability management program.

The state-run agency has already surpassed the target set by the Governance Commission for Government Owned and Controlled Corporations (GCG) of reducing its obligations to P358.72 billion by end-2021, Besido-Garcia said.

Meanwhile, PSALM is already close to its target of slashing its maturing obligations by P24.63 billion and prepay its P19-billion obligations to the Bureau of the Treasury (BTr), as reported to the Department of Finance earlier this year.

So far this year, PSALM was able to successfully privatize the 650-megawatt (MW) Malaya thermal power plant (TPP) after five attempts in the past two years.

Fort Pilar Energy Inc. was declared as the winning negotiating party in the negotiated sale process of Malaya TPP last May with a bid of P3.12 billion.

PSALM has incurred an average annual net loss of P1.2 billion in maintaining the power asset from 2010 to 2019.

But if based on the years that it is running as a must run unit (MRU) by the National Grid Corp. of the Philippines (NGCP), PSALM’s average annual net amounts to P556.2 million.

“Thankfully, we successfully privatized Malaya TPP. Hopefully once we finish that process, we will also use the proceeds from that Malaya sale to pay off more of the financial obligations before the year ends,” Besido-Garcia said.

On the turn-over date, Malaya TPP is no longer required to run as an MRU as approved by the Department of Energy.

Meanwhile, PSALM is also looking to privatize real estate assets within the year to further bring down its obligations. Besido-Garcia said.

PSALM has real estate assets with an aggregated land area of 100.44 million square meters (sqm), consisting of 6,160 lots located in various parts of the country. Of the total, 60 percent is in Luzon, 39 percent in Mindanao and the remaining one percent in the Visayas.

PSALM is the agency mandated by the Electric Power Industry Reform Act (EPIRA) of 2001 to handle the sale of the remaining state-power assets and the financial obligations of the National Power Corp. (Napocor). Its corporate life ends in 2026.