By Lenie Lectura – January 23, 2019
from Business Mirror
THE Power Sector Assets and Liabilities Management Corp. (PSALM) trimmed its financial liabilities by P78 billion last year.
In 2018, the state firm settled a total of P78.66 billion for maturing obligations broken down into P31.5-billion debts, P29.07 billion in IPP lease obligations and P18.08 billion in interest and other charges.
After this, PSALM’s outstanding balance stood at P449.94 billion as of end-2018.
The state firm also recorded P25 billion in foreign-exchange losses.
“With peso depreciation in 2018 versus end of 2017, total forex impact is around P25 billion,” PSALM said.
The state firm explained that for every P1 devaluation to the US dollar, there is an P8-billion increase in PSALM’s financial obligations and forex losses incurred.
Under the Electric Power Industry Reform Act (Epira), PSALM is the government agency tasked to repay the debts of the National Power Corp. (NPC).
Funds in settling PSALM’s assumed financial obligations are sourced from collections from its power generation, privatization proceeds and universal charge.
The bulk of PSALM’s financial obligations are foreign denominated, with a huge portion based in US dollars. Any devaluation of the peso against the US dollar from time to time contributes to the surge in financial obligations. The commissioning of new power plants at that time also led to the spike in the debts’ interests.
It is projected that with PSALM’s continuous privatization efforts—including the sale of real-estate assets, collection of universal charge and power-generation proceeds—its financial obligations will further decrease substantially when the corporate life of PSALM ends in 2026.