The House Committee on Energy on Wednesday approved a bill extending the corporate life of the Power Sector Assets and Liabilities Management Corp. (PSALM) for another 30 years.
Pampanga Rep. Juan Miguel Macapagal-Arroyo, the panel chairman, said the bill would amend Republic Act (RA) 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).
Earlier, Finance Undersecretary Bayani Agabin told lawmakers that it would be beneficial for the country to have the life of PSALM extended considering that it has substantial debts to be paid.
He said if PSALM’s life would be allowed to expire, that would be absorbed in the balance sheet of the government and would increase the country’s deficit.
House Committee on Ways and Means Chairman Joey Sarte Salceda, one of the principal author of the bill, has also warned that the government may have to shoulder as much as P198 billion in debts from the liabilities of the PSALM if its corporate life is not renewed.
“If PSALM’s debt is not isolated from those of the national government, however, we would see an instant increase in the national government debt stock of at least P198 billion, given the delays in the privatization efforts,” Salceda warned.
The corporate life of PSALM is expiring on June 26, 2026.
Citing his assessment of PSALM’s debt management capabilities, Salceda said he expects some P198 billion of its debts will remain in 2026, following delays in the privatization of key assets due to the Covid-19 pandemic. RA 9136 was enacted to ensure the solvency of the-then severely financially National Power Corp. (NPC). The EPIRA created PSALM in 2001, a government-owned and -controlled corporation, with a corporate life of 25 years.
PSALM has the principal mandate of managing the orderly sale, disposition, and privatization of the NPC generation assets, real estate and other disposable assets, and Independent Power Producer contracts to optimally liquidate all NPC financial obligations, including stranded debts and stranded contract costs (SCC), which were transferred to and assumed by PSALM pursuant to the EPIRA. At the end of PSALM’s life, all its assets and outstanding debts and IPP contract costs will be assumed by the national government.