Psalm saves P510M from Marcos’ tax relief for power producers
MANILA, Philippines — The Power Sector Assets and Liabilities Management Corp. (Psalm) said Friday it had saved P510 million after President Marcos ordered a tax relief for some power producers.
In a statement, the state-run group said its real property tax liabilities from five power plants under build-operate-transfer contracts were slashed from P626.46 million to P116.52 million.
This was the result of Executive Order No. 83 that the country’s chief executive signed earlier this month.
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The order was meant to maintain the financial stability of independent power producers (IPPs) by reducing their real property taxes. It likewise condoned the interests or penalties related to RPT liabilities.
“Through the EO, the President of the Philippines acknowledged that while IPPs are the taxable entities to pay the RPTS, it is the National Power Corporation or Psalm that ultimately bears the contractual obligation on the reduction and condonation of RPT liabilities under EO No. 83,” said Psalm president and chief executive officer Dennis Edward Dela Sema.
“This provides much-needed financial relief to PSALM and our partner IPPs. This allows us to manage our obligations more effectively while ensuring the continuous and stable supply of electricity,” the official added.
Similar orders were issued since 2011, as the Philippine Independent Power Producers Association (Pippa) cried for help from the government due to threats from local government units.
For years, IPPs were at the receiving end of the ire of local leaders amid the issue involving billions of pesos in taxes. Some local government units even warned that they would deny processing permits of the companies or even take over their operations.
IPPs are those entities engaged in generating electricity. They then sell the produced power to distributors, such as Manila Electric Co. (Meralco).
IPP charges are included in the generation charge, which usually accounts for at least half of the power bills of Meralco customers.
