Close  

Psalm told to collect P59.23B in unpaid dues from IPPAs, electric coops

By: - Reporter / @bendeveraINQ
/ 05:14 PM May 14, 2019

MANILA, Philippines — The government is going after electric cooperatives and independent power producer administrators (IPPAs) that owe the state-run Power Sector Assets and Liabilities Management Corp. (Psalm) a total of P59.23 billion at end-2018.

In a statement Tuesday, the Department of Finance (DOF) said these long overdue accounts had been transferred to Psalm by the National Power Corp. (Napocor) when Republic Act (RA) No. 9136 or the Epira Law took effect in 2001.

ADVERTISEMENT

Based on Psalm’s report to Finance Secretary Carlos G. Dominguez III, who chairs its board of directors, IPPAs’ pending obligations reached P28.46 billion as of December last year.

However, “some of the IPPAs are contesting the amounts due in courts or in arbitral tribunals,” DOF said.

FEATURED STORIES

According to DOF, San Miguel Corp.’s South Premiere Power Corp. (SPPC), which administers the Ilijan gas-fired power plant in Batangas City, had the biggest unpaid dues among IPPAs, worth P19.75 billion.

“Psalm earlier terminated the IPPA, but the termination has been enjoined by the courts,” DOF said of SPPC.

Besides IPPAs, 10 electric cooperatives and industries had combined unpaid obligations of P28.74 billion as of 2018, the largest and longest overdue of which was Lanao de Sur Electric Cooperative’s P9.63-billion worth owed 16 years ago.

In her report to Dominguez, Psalm president and chief executive Irene Joy Garcia said that “due to these overdue accounts, the government through Psalm is constrained to resort to borrowings that the national government guarantees, in order for Psalm to timely fulfill its mandate of liquidating the financial obligations of the Napocor.”

“In fact, in 2018, Psalm borrowed about P23 billion to cover its maturing obligations, and Psalm is set to borrow $1.1 billion for obligations maturing this end of May 2019. As a result, Psalm had to pay interest, guarantee fees and other finance charges of about P2.62 billion per year. Had the IPPAs and electric cooperatives paid, Psalm would not incur this much additional costs,” Garcia said.

As such, DOF said “Dominguez instructed Psalm to relentlessly pursue collection efforts against these IPPAs and use all remedies available to protect the rights of the government and the Filipino people.”

For Dominguez, “all these borrowing costs could have otherwise been utilized by the government for the construction of public school classrooms or to build roads and bridges.”

ADVERTISEMENT

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Bonds, Business, business news, Carlos Dominguez III, DoF, electric cooperatives, electricity, IPPs, local news, News, Philippine news updates, power, PSALM‎
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.