The Power Sector Assets and Liabilities Management Corp. (PSALM) slimmed down its financial liabilities to P466.2 billion in 2017.
A 7.9 percent decrease from 2016’s P506.3 billion was recorded, as well as a 62.4 percent decrease vis-à-vis the peak 2003 level of P1.24 trillion.
The state-run firm settled a total of P73.3 billion in financial obligations, which consisted of P55.9 billion in debts and independent power producer (IPP) obligations, and P17.4 billion interest.
Apart from debt, PSALM also paid P10 billion to the Bureau of the Treasury for the advances made in 2106 used to bridge the financing gap.
Payments came from collections from its power generation, privatization proceeds, and universal charge (UC) – which is a separate line in consumers’ power bills used to pay off debts of the National Power Corp. (Napocor).
The privatization proceeds of PSALM stands at P528 billion to date, while collections from the stranded contract cost portion of the universal reached P56.9 billion.
The firm said that it’s looking to decrease its financial obligations further when its corporate life ends 2026 as it is keen to continue its privatization efforts and the sale of real estate assets, collection of UC and power generation proceeds.
PSALM’s financial obligations peaked to P1.24 trillion in 2003. A bulk of these is foreign-dominated, with a huge portion based on US dollars.
Its debt servicing, which includes interest and other charges, reach P1.47 trillion at the end of 2017.
These payments covered P555.7 billion maturing IPP obligations, P567.7 billion principal debts and P346 billion interest and other charges.
“These factors, PSALM is referring to, include the necessary commissioning of new power plants between 2001 to 2006 to prevent the power shortage that paralyzed the country in the 1990s until early 2000, refinancing or new loans to fill the gap when maturing obligations fall due, and the vulnerability of PSALM’s assumed loans to foreign exchange fluctuations,” PSALM said.
“For every peso depreciation against the US dollar, PSALM’s financial obligations will increase by P7.26 billion,” it added.