THE Power Sector Assets and Liabilities Management (PSALM) Corp. has won approval to seek a P43-billion loan from the Development Bank of the Philippines (DBP), saying that despite “setbacks” encountered during quarantine, it does not expect to default on any of its obligations.
“This loan will be needed because, while PSALM anticipates revenues coming from privatization proceeds, power sales, delinquent and overdue accounts collections, and UC (universal charge) Stranded Debts proceeds, these revenues will not be sufficient to cover all the maturing obligations and operating expenses for the rest of 2020,” it said in a statement issued Wednesday.
PSALM said the Department of Finance has approved its request to seek P43 billion from the DBP, the first tranche of which it can access in June, to further settle the financial obligations it assumed from the National Power Corp.
PSALM, which is tasked to privatize the government’s power assets, said it managed to reduce its overall debt to P404.28 billion this month from P422.01 billion in January.
“PSALM has been paying its maturing debts and IPP (independent power producer) obligations, including interest and other charges, despite the ECQ (enhanced community quarantine) and the deferment of revenue collections from power bills, certain IPPA (independent power producer administrator) payments and the Universal Charge,” PSALM President and Chief Executive Officer Irene Joy B. Garcia said.
“There are certainly serious financial setbacks caused by COVID-19 (coronavirus disease 2019) and the ECQ (enhanced community quarantine), but PSALM will not default on any of its maturing obligations,” she added.
In April, PSALM remitted P46 million to local government units hosting renewable power plants. — Adam J. Ang