PSALM Extension to 2036 Clears Way for Agus-Pulangi Hydropower Rehabilitation

The Department of Energy welcomed the enactment of Republic Act 12179, which extends PSALM’s corporate life by 10 years, paving the way for the long-awaited rehabilitation of the Agus-Pulangi hydropower complex and continued management of energy sector liabilities.

The law, which lapsed into effect on April 18, 2025, amends Section 50 of Republic Act No. 9136, also known as the Electric Power Industry Reform Act of 2001. It allows the Power Sector Assets and Liabilities Management Corporation (PSALM) to continue its asset privatization efforts and financial obligations beyond its original 2026 mandate.

The DOE said the extension gives PSALM the legal and operational framework needed to complete its mandate. “The extension also provides PSALM with additional time to manage its outstanding financial obligations, thereby preventing the transfer of its remaining liabilities to the National Government in 2026,” Energy Secretary Raphael P.M. Lotilla said in a statement.

With its corporate life extended, PSALM can now pursue the long-delayed rehabilitation of the Agus-Pulangi hydropower complex in Mindanao. Lotilla said the rehabilitation could restore at least 400 MW of renewable capacity, while improving safety conditions for surrounding communities vulnerable to flooding and infrastructure deterioration.

The project had been shelved in previous years due to the lack of a viable counterparty, as PSALM’s impending dissolution discouraged long-term investment. The law now clears a path for that rehabilitation effort to proceed, a development the DOE describes as critical to Mindanao’s long-term energy security and climate resilience.

The DOE also noted that the extension enhances PSALM’s ability to negotiate better financing terms, as lenders will now have clarity over the agency’s extended mandate. This is expected to translate into more favorable borrowing conditions for managing the remaining liabilities tied to energy sector reforms.

“We extend our sincere gratitude to all legislators and advocates whose efforts made the passage of this important law possible,” Lotilla said.

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