Naga City acquires Psalm property

MANILA, Philippines – The Naga City government has completed the purchase of a Power Sector Assets and Liabilities Management Corp. (Psalm) property in the city for P8.761 million.

In a recent statement, Psalm said Naga City had remitted the payment for one of its land assets located in Barangay Colon. Other needed documentation had also been submitted.

This stems from the memorandum of agreement signed in January by Psalm and the Naga City government involving the 466-square-meter Psalm lot, registered as Lot No. 751.

READ: Psalm saves P510M from Marcos’ tax relief for power producers

“Naga City is planning to develop the purchased lot into an access road to facilitate the construction of a seaport, being part of the city’s ongoing reclamation project,” Psalm said.

“All proceeds from the successful sale of any Psalm asset will be used to augment the funds needed for the settlement of the Corporation’s assumed financial obligations,” it added.

The state-run firm is mandated by the Electric Power Industry Reform Act to settle all the liabilities and obligations it assumed from Napocor by selling power and other disposable assets.

Its financial obligations stood at P272.14 billion as of end-January, a 78-percent decline from the peak level of P1.24 trillion recorded in 2003.

Earlier, Psalm said it had saved P510 million following President Marcos’ executive order that provided tax relief for some power producers.

According to Psalm, its real property tax (RPT) liabilities under its build-operate-transfer contracts last year were slashed to P116.52 million from P626.46 million.

Signed in February, Executive Order No. 83 reduces and condones RPT –  including interests and/or penalties – assessed on power generation facilities and independent power producers under BOT contracts.

“The reduction and condonation of RPT liabilities under EO No. 83 provide much-needed financial relief to Psalm and our partner IPPs,” PSALM President and CEO Dennis Edward Dela Serna said.

“This allows us to manage our obligations more effectively while ensuring the continuous and stable supply of electricity,” he added.

IPPs refer to entities engaged in generating electricity, which are then sold to power distributors such as Manila Electric Co. (Meralco).