Recto wants to prolong existence of PSALM to plug deficit

Finance Secretary Ralph Recto — INQUIRER.net/Ryan Leagogo

Finance Secretary Ralph Recto said the corporate life of state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) should be extended “by another 25 years, possibly” since it still has a lot of assets for sale and financial obligations to settle.

“I think it should be extended. PSALM still has many debts, has many power assets that can be sold,” Recto said on the sidelines of the Economic Journalists Association of the Philippines’ induction last week.

According to Recto, PSALM is currently prioritizing the sale of the 796.46-megawatt (MW) Caliraya-Botocan-Kalayaan hydroelectric power in Laguna province, that, when disposed of, could generate between P50 billion and P100 billion to “help plug our deficit for next year.”

“There will be a bidding in the next few months. The bidding is scheduled for this year and awarding [the contract to the winning bidder] may happen next year,” he said.

He added the privatization, including the rehabilitation, of the Agus-Pulangi Hydropower Complex in Mindanao is also ongoing.

“We’re open to privatizing that as well. Of course, we have to get the consent of the other stakeholders,” he told reporters.

Last month, PSALM and the National Irrigation Administration turned over the ownership and operation of the 165-MW Casecnan Hydroelectric Power Plant in Pantabangan town, Nueva Ecija province to Fresh River Lakes Corp., a subsidiary of Lopez-led First Gen Corp.

PSALM is mandated by the Electric Power Industry Reform Act to liquidate all the existing generation assets, independent power producer contracts, real estate and other disposable assets of state-run National Power Corp. (Napocor).

PSALM, whose corporate existence will cease in June 2026, has been selling the assets to settle all the liabilities and obligations it assumed from Napocor.

As of January this year, the state-run corporation’s financial obligations stood at P294.27 billion, a substantial reduction of 76.3 percent from a peak of P1.241 trillion worth of debt incurred in 2003.Bills have likewise been filed in the Senate seeking the extension of PSALM’s corporate life, with the latest one lodged by Senator Raffy Tuflo, who chairs the Senate energy committee.

Senate Bill No. 2580, which is still at the committee level, seeks to prolong PSALM’s existence for another 50 years, or by 2076.

“By extending PSALM’s corporate life, the latter may be able to manage its remaining contractual obligations whose term would end beyond June of 2026; this includes a proposed [Napocor] property in Diliman, Quezon City and the rehabilitation project of the Agus-Pulangi Hydropower Complex, both significant endeavors that benefit from the extension of PSALM Corp.’s corporate life,” Tulfo said in an explanatory note. INQ