State-run Power Sector Assets and Liabilities Management (PSALM) Corp. said it generated savings of P509.94 million from the implementation of Executive Order No. 83 signed by President Ferdinand Marcos on Feb. 13, 2025.
PSALM said in a statement it reduced its real property tax (RPT) liabilities for 2024 from five build-operate-transfer (BOT) power plants, cutting the total amount to P116.52 million from P626.46 million.
“The reduction and condonation of RPT liabilities under EO No. 83 provide much-needed financial relief to PSALM and our partner IPPs,” said PSALM president and chief executive Dennis Edward Dela Serna.
“This allows us to manage our obligations more effectively while ensuring the continuous and stable supply of electricity,” he said.
PSALM said it remains committed to sound financial management and continues to work closely with other government agencies to implement policies that support the long-term stability of the energy sector.
EO No. 83 reduces and condones RPT, including interests and/or penalties, assessed on power generation facilities and independent power producers (IPPs) under BOT contracts with government-owned and – controlled corporations (GOCCs).
PSALM said that under the issuance, the RPT assessment level for 2024 was reduced to 15 percent of the fair market value of property, machinery and equipment, depreciated at 2 percent per annum, less any amount already paid by IPPs.
It said similar EOs were issued on an annual basis since 2011.
The agency said the President acknowledged that while IPPs are the taxable entities to pay the RPTs, it is the National Power Corp. or PSALM that ultimately bears the contractual obligation on these taxes.
The EO said the collection of RPTs for 2024, which were assessed by concerned local government units (LGUs) at the maximum assessment level of 80 percent pursuant to Section 218 of RA No. 7160, as amended, “will trigger massive direct liabilities on the part of Napocor/PSALM, thereby threatening their financial stability, the government’s fiscal consolidation efforts, stability of energy prices, and may even trigger further cross-defaults and significant economic losses across all sectors.”