PRIB: Senate approves PSALM's corporate life extension
January 20, 2025
Senate approves PSALM's corporate life extension
The Senate approved on Monday, January 20, 2025 Senate Bill No, 2837, or an act extending the corporate term of the Power Sector Assets and Liabilities Management (PSALM) Corporation.
The bill aimed to amend section 50 of Republic Act No. 9136, otherwise known as the Electric Power Industry Reform (EPIRA) Act of 2001.
Under the bill, the PSALM Corporation shall continue to exist for a period of five years from the expiration of its original term on June 26, 2026.
The PSALM was created in 2001 through the EPIRA Law which was essentially enacted to restructure the power sector previously monopolized by the National Power Corporation or NPC. It was entrusted to formulate and implement a privatization plan for the government's energy assets previously held by the NPC. The corporation also took over the ownership of all existing NPC generation assets, liabilities, Independent Power Producers (IPP) contracts, real estate, and all other disposable assets. And it is also mandated to manage the orderly sale, disposition, and privatization of these assets with the objective of liquidating all NPC financial obligations and stranded contract costs.
"PSALM'S wealth of experience and knowledge gained throughout its 22 years of existence serves to operationalize the policies and provisions enshrined in the EPIRA," Sen. Mark Villar said in his sponsorship speech.
According to Villar, as of December 2023, PSALM substantially reduced its financial obligations by 76 percent or from PI.2 trillion to P294 billion. PSALM likewise remitted to the Bureau of Treasury around P26 billion as dividends to the national government.
"PSALM is at the crucial point where the wheel has to continue spinning for the Corporation to fully achieve its mandate contemplated under EPIRA. Non-renewal of PSALM's corporate life entails management of obligations that necessitate funding of the projected deficit of P275 billion. Should it be untimely abolished, the national government would have to absorb all of PSALM's outstanding financial obligations," he explained. (Senate Public Relations and Information Bureau)
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