The Power Sector Assets and Liabilities Management Corp. (PSALM) said it can raise some P200 billion from its receivables and the sale of power assets, but the amount is still not enough to pay off the remaining debts incurred by the National Power Corp. (NPC).
“The estimate of our key remaining assets is about P45 billion. With regards to our receivables, we have about P107 billion,” PSALM President PSALM President Denis Dela Serna said during a budget hearing of the Senate subfinance committee last Friday.
Beyond PSALM’s corporate life in 2026, the state firm is expecting P42 billion more in proceeds from the sale of other assets that PSALM needs to collect after 2026.
“For example, we privatize the transmission business under NGCP [National Grid Corporation of the Philippines], that business continues until 2034 so beyond 2026. If we include all of that plus other privatization [of] IPPs [Independent Power Producers] then that’s about another P42 billion,” said Dela Serna.
PSALM has paid off P54.75 billion worth of debts, interest and other charges in the first half of the year, bringing down its financial obligations to P315.3 billion at end-June.
With the total expected proceeds, PSALM would still need roughly P120 billion to wipe out all its debts.
PSALM, which is seeking a budget of P201.42 billion for 2024, is pushing for an extension of its corporate life for another 30 years from June 2026. If it will not be extended, the debts would be absorbed by the national government.
“For me, if we have assets to privatize then there’s a reason to extend. Obviously, the goal here is to extend so that we can square off, we can pay off all the debts with the remaining assets, but even with the remaining assets and the remaining collectibles, it seems like we will not have enough cash to pay off the remaining balance of the P315 billion,” Senator Sherwin Gatchalian said during the hearing.
PSALM has privatized 45 power plants, representing 82 percent of the capacity portfolio. The remaining power plants that are up for privatization are the 165-megawatt (MW) Casecnan Hydroelectric Power Plant and the Agus-Pulangi Hydroelectric Power Complex.
For the remaining IPP plants, PSALM has yet to sell the Caliraya-Botocan-Kalayaan hydro facility, Mt. Apo Geothermal and Mindanao coal plant.
“We believe, with regard to the corporate life extension of PSALM, [it] is in the best position to continue with the sale, manage all those liabilities and to collect all receivables because the counterparty to those contracts, whether it is collectibles or IPP contacts that will expire beyond the life of PSALM, is PSALM,” said Dela Serna.