PSALM orders Olongapo City govt. to pay Php6.7B in overdue electric bills


The Power Sector Assets and Liabilities Management Corporation (PSALM) has demanded the Olongapo City government to settle its overdue electric bills and other charges worth at least Php6.71 billion.

The state-owned firm said it sent a final demand letter to the local government unit (LGU) to pay the obligations accumulated in the past 12 years.

In their demand letter to Olongapo City Mayor Rolen Paulino, PSALM President and CEO Irene Besido-Garcia and acting Vice President for Finance Manuel Marcos Villalon stressed that the LGU must pay its dues or face legal action, which include civil, criminal, and administrative cases.

PSALM said the city government accumulated electricity bills with interest and value-added tax (VAT) amounting to Php5.66 billion; default wholesale supplier arrangement charges with interest and VAT worth Php813.77 million; deferred accounting adjustment charges with interest and VAT amounting to Php230.71 million; and VAT on the automatic cost recovery mechanism worth Php8.72 million.

Copies of the final demand letter were furnished to PSALM Chairman and Finance Sec. Carlos Dominguez , Energy Sec. Alfonso Cusi and Interior and Local Government Sec. Eduardo Año.

PSALM first sent its final demand letter to the Olongapo City government in May 2019, with dues then amounting to Php6.18 billion, having been unpaid for over nine years.

The LGU responded by remitting Php20 million in July and December last year, leaving a still sizeable amount of arrears unpaid. This then ballooned to Php6.713 billion as of July this year and will continue to increase if it remains unsettled, according to the government-owned firm.