By Myrna M. Velasco – September 19, 2017, 10:01 PM
from Manila Bulletin
The universal charge pass-on in the consumers’ electric bills had given Power Sector Assets and Liabilities Management Corporation (PSALM) collections reaching P53 billion as of July this year.
For the newly approved universal charges on stranded debts and stranded contract costs, PSALM Officer-in-Charge Lourdes Alzona indicated that such would add P37 billion in their collections over the nine-year recovery period prescribed by the Energy Regulatory Commission.
She said the fresh batch of UC collections “will provide PSALM with available funds for debt servicing.”
Alzona added “though the UC for stranded debt is a nine-year levelized recovery starting only this last quarter of the year, PSALM’s exposure to interest and forex (foreign exchange) risks will somehow be mitigated.”
The initial UC pass-on of stranded contract costs was approved in 2011, and the company executive qualified their collections sets off “funding source and cash relief in liquidating PSALM’s huge financial obligations.”
She stressed that as cash flows of the state-run firm improved due to UC collections, it manages to “have no refinancing or just borrows less to cover the yearly operational shortfall.”
Based on company data, the total financial obligations of PSALM had already been pared to P502.72 billion as of first quarter this 2017 – comprising of P277.12 billion debts and P225.60 billion on lease obligations with independent power producers. It was slight downtrend from end of December 2016’s debt level of R506.3 billion.
Nevertheless, it is apparent that its debt profile is dominated by US dollars, hence, the company’s risk exposure to forex fluctuations could still be that high.
Roughly 49-percent accounted for dollar-denominated debts or R135.73 billion; while peso-denominated had been at 41.04-percent or P113.73 billion. The rest is in Japanese yen for 9.98-percent at P27.66 billion.
It has been PSALM’s target to fully wipe out its outstanding financial obligations before the end of corporate life in 2026.