The Power Sector Assets and Liabilities Management Corp. (PSALM) has trimmed to P355.2 billion its financial obligations as of end-2021 from close to P538 billion before President Rodrigo Duterte assumed office in 2016.
PSALM President-CEO Irene Joy Besido Garcia said she expects to further improve on this P182.78- billion or 34-percent cut in the corporation’s financial dues by targeting to further bring it down to about P335.89 billion before President Duterte leaves office in end-June this year.
“That’s going to be a P202-billion reduction in financial obligations from the P537.98 billion level on June 30, 2016 right before the start of the Duterte administration,” Garcia said in her report to Finance Secretary and PSALM board chairman Carlos Dominguez III.
She said that last year, PSALM was able to successfully reduce its financial obligations by P26.47 billion—paying off P4.06 billion in debts and P22.41 billion in lease obligations of due to independent power producers (IPPs)—from P381.72 billion as of end-2020.
PSALM’s total revenues in 2021 from its service and business income; shares, donations, grants; and gains amounted to P79.46 billion, which is higher by 27 percent from the P62.43 billion revenues it recorded at the end of 2020, Garcia said.
PSALM managed well its operating expenses, recording just a 2 percent increase from P70.11 billion in 2020 to P71.22 billion in 2021, she added.
Overhead expenses, accounted for less than 5 percent PSALM’s total income as the corporation was able to implement substantial cost-cutting measures while increasing revenue collection through successful privatization activities and higher energy sales.
Garcia said all these strategies led PSALM to yield a net surplus of P8.94 billion in 2021, up by P6.66 billion or a whopping 293 percent increase from its net surplus of P2.27 billion in 2020.
She attributed PSALM’s remarkable growth in net income or surplus to the corporation’s successful privatization activities in 2021 and the substantial increase in energy sales. She highlighted the 11,610-percent hike in gains from asset privatization, which jumped to P4.38 billion in 2021, from only P37.5 million in 2020. She also mentioned the 27 percent increase in service and business income mainly due to higher energy sales in 2021 as economic activities started to normalize, and more industries resumed operations.
Last year, PSALM was able to remit to the Bureau of the Treasury (BTr) P8.32 billion of dividends from PSALM’s subsidiary, the National Transmission Corp. (Transco), representing 50 percent of Transco’s net earnings from 2016 to 2019 and another P2.45 billion from its 2020 net income.
From power sales in 2021, PSALM earned P13.15 billion, which translates into a 93.5-percent collection efficiency rate or 3.53 percent above its scorecard target, Garcia said.
PSALM’s universal charge (UC) collection efficiency of 98.3 percent enabled the agency to collect P17.93 billion in 2021.
As a result, PSALM was able to disburse P13.9 billion to the National Power Corp. (Napocor) for its missionary electrification projects in underserved communities, and another P32 million to renewable energy (RE) developers.
The PSALM encouraged power customers with delinquent accounts to enter into board approved restructuring agreements and special payment arrangements so they could settle their arrears with PSALM. This yielded P1.35 billion for the agency.
Garcia said PSALM was also able to privatize last year the 650-megawatt Malaya thermal plant for P3.18 billion, which includes the plant’s remaining fuel inventory. The disposal price was way beyond the minimum bid price of PSALM.
PSALM also raised P2.7 billion from the sale of 31 lots—composed of 18 lots targeted for disposal in 2021, 13 that were undisposed in 2020, and 1 lot that was not part of the target.
To mitigate its foreign exchange risks, PSALM in 2021 increased the share of domestic sources in its borrowing mix, from 34 percent in 2020 to 37 percent. PSALM did not incur new borrowings that were foreign denominated.
“We ensured the timely payment of all maturing interest and borrowing cost of PSALM’s loans amounting to P88 billion,” Garcia said.