PSALM cuts liabilities to P466.1 B in 2017

By Myrna M. Velasco – July 6, 2018, 12:17 AM
from Manila Bulletin

Amid the falling value of the Philippine peso and continued snag on its privatization of power assets, Power Sector Assets and Liabilities Management Corporation (PSALM) was able to cut its liabilities by more than P40 billion last year to P466.1 billion from a heftier level of P506.3 billion in 2016.

PSALM logo

At the very least, that will be several billions less of headaches to Finance Secretary and PSALM Board Chairman Carlos G. Dominguez III who to some extent is like champing at the bit into wiping out the state-run firm’s liabilities within the tenure of the Duterte administration.

“Through the efforts of PSALM is continuously implementing its liability management program and strategies, PSALM’s financial obligations were reduced to P466 billion or US$9.3 billion as of fourth quarter 2017,” the company noted.

It is worth noting that bulk of PSALM’s long-term loans had been denominated in US dollars, hence, the depreciating value of the Philippine currency had been making dent on its financial liability management strategy.

As of end-December last year, the state-run firm indicated that total debts were still at P263.31 billion or US$5.27 billion, down by P12.2 billion from P275.4 billion in 2016.

On its lease obligations with independent power producers (IPPs), the company was able to slash it by a substantial P28.1 billion to P202.8 billion from the year-ago level of P230.9 billion.

Dollar-denominated loans account for the lion’s share of 50.52 percent as to its remaining debts. That amounted to US$2.664 billion or P133.028 billion as of end last year.

Loans in Philippine peso-denomination amounted to P102.955 billion or 39.12-percent; while Japanese-yen debts hovered at P27.280 billion, which had 10.36-percent fraction in the pie.

As part of its liability management scheme, PSALM has likewise been calculating steps on how it can continually divest the remaining power assets of the National Power Corporation so it can fetch additional proceeds that can aid it in expunging its monstrous obligations.

The new management of the state-owned firm though has yet to announce as to which assets will be prioritized on the divestment milieu – aside from the option of selling the Napocor complex which has already gotten the preliminary nod of the finance department.

On top of proceeds from sale of assets, the government has also been contemplating on utilizing the Malampaya fund to partly retire PSALM’s outstanding financial obligations – that way, consumers can already be spared from paying universal charges in their electric bills.