PSALM settles P52.55 B financial obligations

The Power Sector Assets and Liabilities Management Corp. (PSALM) has settled its financial obligations totaling P52.55 billion as of end-September.

In a statement, the state-run firm said the amount consisted of P19.53 billion in debts, P13.27 billion in interest, and P19.75 billion in lease obligations to the independent power producers (IPPs).

“This is solid proof that PSALM has been effective and consistent in fulfilling its mandate to liquidate the financial obligations it absorbed from the National Power Corp., amidst the impact of currency fluctuations and other market forces,” PSALM president and CEO Lourdes S. Alzona said.

PSALM said it was able to liquidate its financial obligations because of its privatization program.

It said the payment for Power Barges 101, 102 and 103, which were turned over to their new owners in July this year, was the latest addition to its privatization proceeds.

These assets were acquired by TransAsia Oil and Energy Development Corp., the power generation arm of the Phinma Group, for P420 million.

PSALM said the financial obligations, inclusive of interest, it assumed from Napocor under the Electric Power Industry Reform Act peaked to P1.63 trillion in end-2003 from P1.22 trillion in 2000 with the commissioning of new power plants and the devaluation of the peso against the US dollar.

However, the state-run firm said its commitment to liquidate its financial obligations and eventually reduce its stranded debts through its Liability Management and Privatization Programs trimmed by nearly 60 percent from its the peak in 2003.

Its financial obligations amounted to only P674.04 billion as of the third quarter of 2015, inclusive of P108.82 billion interest.