The depreciation of the peso against the US dollar and other major currencies weakened the capability of state-run Power Sector Assets and Liabilities Management Corp. to settle the financial obligations of National Power Corp., an official said over the weekend.
PSALM manages the assets and liabilities of National Power Corp. as mandated under the Electric Power Industry Reform Act of 2001.
PSALM officer-in-charge Lourdes Alzona said the agency had total financial obligations of P482 billion as of end-September, of which 78 percent were in US and Japanese currencies.
Alzona said these foreign denominated obligations were “severely affected by the continuing devaluation of our Philippine peso.”
“The peso depreciation of P1.26 from a rate of P49.81 to the dollar in end 2016 to P51.07 to the dollar in September 2017 further increased PSALM financial obligation balance by P10.40 billion,” Alzona said.
She said financial obligations serviced by PSALM for the first nine months amounted to P54.53 billion, substantially higher compared to the P32.31 billion that it serviced in the same period the previous year.
PSALM has so far paid a principal debt of P25.51 billion, interest of P8.24 billion and lease obligations of P20.78 billion.
“Funding sources are the collection of privatization proceeds including payment for the privatized Sucat decommissioned plant and the generated funds from operation of remaining plants,” Alzona said.
PSALM’s P482.1-billion debt consists of outstanding debts amounting to P270.26 billion and independent power producer lease obligations in the amount of P211.83 billion.
PSALM was created to take over the assets of Napocor and assume its liabilities and obligations which reached P830.7 billion in 2001.
The P830.7 billion financial obligations was composed of long-term debts from various creditors of Napocor, and built-operate-lease obligations to independent power producers who built it in the 1990s to ensure power adequate supply.
PSALM has since then implemented the privatization of government’s power assets and implemented other strategies to trim down its debts.
PSALM recently sold the decommissioned Sucat power plant for P305.2 million and is in the process of bidding out the 650-megawatt Malaya thermal power plant in Rizal this year.
The company is also taking an inventory of its real estate assets to be used to pay off debt.