Senator Sherwin Gatchalian said on Wednesday that the Power Sector Assets and Liabilities Management (PSALM) can ask President Rodrigo Duterte to exempt PSALM from paying dividends until it finally settled its Php550 billion debt.
“The President should approve (the exemption). Under the law, the President has the power,” Gatchalian said in media interview after the Senate inquiry into the PSALM’s failure to remit dividends due to the national treasury.
During the hearing, Gathalian discovered the PSALM is using the dividends to pay the debt it inherited from under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA).
Under R.A. 9136, PSALM was established and mandated to take ownership of all existing National Power Corporation (Napocor) generation assets, liabilities, IPP contracts, real estate and all other disposable assets.
Gatchalian said the PSALM’s total debts had reached to more than Php900 billion combined from inherited liabilities and from the government loans used to build power plants.
“Right now, the PSALM’s debt from different banks and other people is still Php550 billion. It was reduced but still substantial so they requested to pay it first and not to remit dividends,” Gatchalian said.
Republic Act No. 7656 mandates all the Government-Owned Or –Controlled Corporations (GOCCs) to declare and remit at least 50 percent of their annual net earnings.
However, a Commission on Audit (COA) report revealed that PSALM has not remitted Php29.39 billion dividends to the Bureau of Treasury from 2004 to 2014. It has actually paid only Php2.113 billion from 2004 to 2015.
“The problem is since 10 years ago, the exemption was not approved by the President. So it accumulated. It needs the approval of the President,” Gatchalian said.
Gatchalian said his committee’s recommendation “is for PSALM to already ask the President to approve this (exemption) because if it is left hanging, they’re violating the law every year.”
The senator emphasized the need to pay immediately the PSALM’s unsettled obligations which will continue to increase due to weakening of the peso against dollar.
“There is a foreign currency risk that’s why we also require PSALM to come up with strategy because if peso will hit 52 (against a dollar), their debt will increase,” he explained. (PNA)
