INQUIRER FILE PHOTO
MANILA, Philippines — The Power Sector Assets and Liabilities Management Corp. (Psalm) has P282.65 billion left in outstanding obligations as of March 31, close to P1 billion less than the peak level recorded in 2003 and with two years and three months left of its corporate life.
Data from the state-run firm also showed that Psalm’s debt stock was slashed by 15 percent to P294.3 billion at the end of last year from P346.6 billion at end-2022.
In a statement, Psalm said these reductions in debt were mainly thanks to the sale of several power generation assets, including a hydroelectric plant in Nueva Ecija.
Created through the Electric Power Industry Reform Act of 2001, it is mandated to absorb the assets of National Power Corp. and pay Napocor’s debts, which were recorded at a high of P1.24 trillion.
Sale of power assets
Psalm, whose corporate existence will cease in June 2026, has been selling such power assets to settle all the liabilities and obligations it assumed from Napocor.
READ: Psalm to trim debt stock by P32B next year
Psalms total debt had been decreasing year after year since P813.9 billion in 2008.
“The reduction in our financial obligations brings us closer to fulfilling Psalm’s mandates and ensuring a sustainable power sector in the Philippines,” said Dennis Edward Dela Serna, president and CEO of Psalm.
The company cited a “plethora of factors” that allowed the continued reduction in financial obligations, including Therma Luzon Inc.’s (TLI) prepayment of P13.72 billion in debt last November.
TLI is the independent power producer administrator of the Pagbilao Coal-Fired Power Plant in Quezon province.
Psalm also sold the 165-megawatt Casecnan Hydroelectric Power Plant to Fresh River Lakes Corp., a subsidiary of Lopez-led First Gen Corp. in February this year, which involved an upfront payment of P17.64 billion.
The privatization of several real estate assets “within the allotted timeline” also enabled the state-led corporation to reduce its debts.
READ: Recto wants to prolong existence of PSALM to plug deficit
Psalm divested four real estate assets and raised P40.66 million in revenues from these.
Lease deals
The company also said that “Proven approaches” such as direct sale, land lease agreements, and exercise of previously issued option notices.
Aside from selling power facilities and other assets, Psalm said it entered into short-term lease agreements over certain assets that are not yet scheduled for privatization, earning additional revenues of P12.06 million.
In terms of power sales, Psalm noted it achieved a collection efficiency rate of 93.35 percent, equivalent to P14.91 billion collection from current power sales of its remaining power plants.
According to Psalm, it intends to continue its privatization initiatives, along with pursuing innovative solutions to manage its residual assets and liabilities. INQ