05 Jul 2022
The Power Sector Assets and Liabilities Management Corp. (PSALM) has trimmed by more than a third its financial obligations as of June 30, 2022, the last day of President Rodrigo Duterte in office. Financial obligations amounted to P538 billion before President Duterte assumed office in June 2016, or a hefty reduction of P195.4 billion by the end of the Duterte administration. Its financial obligation is now estimated at PHP342.6 billion.
Before Secretary Carlos G. Dominguez stepped down as Finance Secretary and the Chairman of the PSALM Board, PSALM President-CEO Irene Joy Besido Garcia reported to him that all payables of PSALM that matured during the Duterte administration have been timely settled by PSALM. Moreover, PSALM paid interest and borrowing costs amounting to PHP108.6 billion during the same period.
As of June 30 of this year, PSALM has reduced its debts totaling P306.8 billion in June 2016 to P264.4 billion. Lease obligations from independent power producers (IPPs) were slashed from P231.2 billion in June 2016 to only PhP78.2 billion as of June 30.
Last year, PSALM's total revenues from its service and business income, shares, donations, grants, and gains amounted to P79.5 billion, which is higher by 27%from the P62.4 billion revenues it recorded at the end of 2020. PSALM achieved 94% collection efficiency for its power sales. Garcia explained that the only reason collection efficiency did not reach 100% was because of the challenges in collecting from Lanao del Sur Electric Cooperative and Maguindanao Electric Cooperative.
PSALM managed well its operating expenses, recording just a 2% increase from P70.1 billion in 2020 to P71.2 billion in 2021.
Overhead expenses, accounted for less than 5% of PSALM’s total income as the corporation was able to implement substantial cost-cutting measures while increasing revenues through successful privatization activities and aggressive collections of receivables.
All these strategies enabled PSALM to yield a net surplus of P8.9 billion in 2021, up by P6.7 billion or a whopping 293% increase from its net surplus of P2.3 billion in 2020.
As of June 29 of this year, PSALM was able to remit to the Bureau of the Treasury (BTr) a total of P5.98 billion in cash dividends representing a portion of 50% of its net earnings in 2018, 2019, and 2021.
In additional to its own dividends, PSALM also recently remitted to BTr another P2.2 billion of dividends on behalf of its subsidiary, the National Transmission Corp. (Transco), representing 75% of Transco’s net earnings for 2021. This additional remittance on behalf of Transco brings to a total of P13 billion the dividends that PSALM has funded as Transco’s dividends.
As the Administrator of the Universal Charge, PSALM maintained 98.21% average UC collection efficiency. In fact, from July 2016 to March 2022, PSALM’s collection of UC amounted to P133.05 billion.
Garcia said that the biggest hurdle of PSALM right now is the impact of the volatile exchange rate movement on its financial obligations because a portion of its loans is dollar denominated.
Strategic Communications and Partnership Division