PSALM settles P4-B loans of electric cooperatives

The Power Sector Assets and Liabilities Management Corp. (PSALM) has paid a total of P4.05 billion worth of financial obligations of electric cooperatives (ECs) as of end-February, in line with the loan condonation scheme. This amount forms part of the total P18.06 billion amount of loans of the ECs which was assumed by PSALM. The P4.05 billion obligations were paid to the National Electrification Administration (NEA) and other government agencies. PSALM is required under Sec. 60 of the EPIRA to assume all outstanding financial obligations of ECs to NEA and other government agencies incurred as of effective date of the law or June 26, 2001, for the purpose of financing the Rural Electrification Program. In January 2004, NEA verified a total amount of P18 billion wroth of EC loans to NEA. Between October 2005 and February 2006, PSALM paid a total of amount of P785.45 million to NEA, bringing to P3.97 billion the total amount of loans paid to NEA. Since February this year, no additional loans were approved for condonation by PSALM. PSALM also did not make additional payments of EC loans to other creditors pending the completion of audit reports on these loans. As of end-February 2006, 118 out of 120 ECS filed an application for reduction in rates due to loan condonation. Some 106 out of 118 loan condonation applications were already evaluated and decided by the Energy Regulatory Commission (ERC). The ERC is currently evaluating 12 EC applications for the said loan condonation. The 12 ECs waiting for the ERC resolution are: Camarines Sur II EC; Guimaras EC Inc.; Nueva Ecija EC Inc.; Negros Occidental EC Inc., Pangasinan I EC; Pampanga I, II and III ECs; Pampanga Rural EC; Siasi Island EC; Sorsogon I EC; and Dinagat Island EC. - GMANews.TV