MANILA – Debt restructuring will help the Power Sector Assets and Liabilities Management (PSALM) Corporation lower its collectibles worth PHP45 billion from electric cooperatives and other entities.
During a budget hearing on Friday, Senator Sherwin Gatchalian saw the list of electric cooperatives with unpaid debts and asked PSALM how they are settling them.
"Some of them are really problematic. Even in the budget hearing of the National Electrification Administration, the same names come up when you talk about these electric coops. Is there any possibility to collect from these electric coops?" Gatchalian asked.
PSALM president and chief executive officer Dennis Edward Dela Serna said restructuring agreements help the coops settle their debts.
He cited the Pampanga III Electric Cooperative (Pelco III), which is now “current” in status.
"Pelco III is one of those coops that for the longest time was in bad shape. They've now entered into restructuring agreement with PSALM and they're current with all their obligations," Dela Serna told Gatchalian.
Dela Serna hopes the Maguindanao Electric Cooperative (Magelco) will also wipe off its debts soon after entering into a restructuring agreement with PSALM.
"We're in that mode of discussion, just to highlight that. We're changing credit and collection policy, number one. Number two, we've entered into special payment arrangements or restructuring agreements wherein the cooperative is able to pay these amounts. And once they enter into that restructuring agreement, we stop interest," he said.
Gatchalian called the move a "good sign," considering Magelco's situation for several years now.
"I would rather encourage restructuring. Like for example, Magelco has been an ailing coop for a long time but appearing that they are restructuring, that means they're really working hard to rehabilitate their electric coop," he said.
"That's a good sign. That's the attitude that we want -- to fix management and we'll help you," he added.
Magelco still owes PSALM PHP3.3 billion while its neighboring power distributor, Lanao del Sur Electric Cooperative (Lasureco), owes PHP14.2 billion
"Part of the messaging that we have given to Lasureco is that we will continue to supply to them but government or PSALM also needs to see their hand extend to us on how they can continue to at least pay or be current with their power bills," Dela Serna said.
PSALM's proposed corporate budget for 2024 is PHP201.42 billion, which is higher by 20 percent or PHP34.05 billion compared to the Budget department-approved PHP167.37 billion in 2023. (PNA)