The Power Sector Assets and Liabilities Management Corp. (PSALM) has reduced its financial obligations by P40.3 billion by the end of 2020, which is almost 4 times over its 2020 target of reducing such obligations. The target given to PSALM was to ensure reduction of P10.184 billion.
In a presentation to Finance Secretary Carlos Dominguez III, who is the Chairman of the PSALM Board of Directors, PSALM president and CEO Irene Besido Garcia reported that PSALM was able to bring down its financial obligations to P381.72 billion as of the end of December 2020, from P422.01 billion at the start of January 2020.
Garcia said the state-run firm collected P12.89 billion from power sales last year, representing a 93.9-percent collection efficiency. On top of this, PSALM collected P2.61 billion from overdue or delinquent accounts, which was P1.66 billion or 175 percent more than its 2020 goal of P945 million, and this was done by allowing flexible payment options that encouraged power customers to settle their past arrears, Garcia explained.
Garcia also mentioned PSALM’s collection of P16.69 billion from the Universal Charge (UC) due from power distribution utilities (DUs) and other electricity suppliers, achieving its 98-percent collection goal.
All these collections were utilized by PSALM to pay not just its financial obligations, but also all the interest and borrowing costs that matured in 2020 amounting to P12.83 billion.
The UC for Missionary Electrification (ME) totaling P11.99 billion in 2020 was fully disbursed by PSALM to the National Power Corp. (Napocor) and another P6.2 million was disbursed by PSALM to Renewable Energy Developers (REDs), Garcia said.
As to the privatization related activities, Garcia highlighted that PSALM collected deferred privatization proceeds totaling P38.66 billion last year. PSALM was also able to dispose of real property assets amounting to P51.65 million in 2020 even amid the COVID-19 pandemic. This was done by adjusting some of its bidding procedures to allow online participation of bidders, remittance by bank transfers and no-contact transactions, Garcia said.
To raise funds from real estate assets not yet scheduled for privatization, Garcia said PSALM entered into short-term lease agreements involving these properties, which generated P29.5 million in additional revenues in 2020.
The early payment of real property taxes, meanwhile, resulted to P15.01 million in savings for PSALM, while the package sale of unserviceable assets in various locations raised P26.45 million more in additional revenues, Garcia said.
With the signing of Executive Order (EO) No. 117, PSALM reduced its real property tax liability to P199 million from P1.06 billion, which led to savings of P861 million for PSALM, Garcia mentioned.
Garcia highlighted that PSALM successfully lowered the average interest rate on its borrowings to 4.17 percent by the end of 2020, from an average of 5.07 percent in end-2019, and with PSALM increasing the share of its loans sourced from the domestic market to 33.55 percent to mitigate its foreign exchange risks.
PSALM was able to save P212.85 million in 2020 from competitive bidding exercises for the purchase of its foreign exchange requirements to service maturing debts. PSALM also effectively defended its legal position in several legal cases to either save or raise funds amounting to over P1 billion.
To support the government’s COVID-19 response programs, PSALM extended the due dates of power billings, UC remittances and submission of UC reports to PSALM.
It also facilitated the early release of P183.21 million to 113 local government units (LGUs) as their share in national wealth and another P505.6 million in Energy Regulations (ER) 1-94 Funds to 16 LGU beneficiaries.
PSALM likewise remitted P92.24 million in dividend payments to the Bureau of the Treasury (BTr) in 2020 to support the government’s pandemic response, Garcia said.
According to Garcia, PSALM successfully maintained its ISO 9001:2015, indicating its firm commitment to ensure that its business processes and systems meet international quality standards.
This year, Garcia said PSALM is targeting to reduce its maturing obligations by P24.63 billion and prepay its obligations of P19 billion with the BTr.
PSALM also aims to collect P10.33 billion in power sales and P359 million in overdue or delinquent accounts in 2021.
It will also strive to maintain its 98-percent collection goal for the UC, and the 100-percent disbursement rate for the UC for missionary electrification and renewable energy (RE) development, she said.
This year, Garcia said PSALM will unload real estate assets worth P948.93 million combined and privatize power assets, including the Malaya Thermal Power Plant (MTTP) in Pililla, Rizal.