Senators reprimand Psalm makers for loan P 78.8-B
Manila, Philippines – Senators on Thursday expressed dismay at revelations the government would be forced to take out loans and pay interest charges as it seeks to offer lower electricity costs to Filipino consumers under the law. of the Republic n Â° 11371 or of the Murang Kuryente law (MKA).
Senator Sherwin Gatchalian, chairman of the Senate Energy Committee, berated executives of the Power Sector Assets and Liabilities Management Corp. (PSALM) for taking out a loan of 78.8 billion pesos, with 21.6 billion pesos in interest, which to be paid by Filipino taxpayers.
“It’s like we’re going around in circles because even though we don’t see [universal charges] on our electricity bills due to the [MKA], part of our taxes will always go to interest payments, âhe said.
Gatchalian made the point during the budget briefing for the Department of Energy and its attached agencies, including government-owned and controlled companies tasked with providing affordable electricity to Filipino consumers.
For 2022, PSALM is seeking congressional approval for its 198 billion peso budget proposal.
Gatchalian reminded the finance ministry that the goal of the MKA is to prevent the government from incurring additional costs related to loans, while reducing the cost of electricity.
“It is not the spirit of [MKA] because the spirit is for us to save on 21.67 billion pesos; instead, we committed an additional 21 billion pesos. So, indeed, it’s really a double whammy, âhe said.
Senator Nancy Binay questioned whether Filipino consumers would still benefit from the Malampaya funds because of the costs the government had to bear with the loans PSALM had taken out.
According to attorney Irene Joy Besido-Garcia, president and CEO of PSALM, the company has requested funding of 76 billion pesos to cover the “blocked costs” and “blocked debts” that were previously passed on to consumers. electricity as a âuniversal chargeâ.
However, only 8 billion pesos were approved in the national spending program, which prompted PSALM to resort to borrowing, amounting to 76 billion pesos, Besido-Garcia said.
She agreed that the purpose of the MKA was to prevent PSALM from borrowing more and to avoid incurring additional borrowing costs.
“The problem is because of the pandemic, I think the fiscal space [of the government] got very tight, so they [economic managers] only gave us 8 billion pesos, so we have to borrow for this year, âshe said.
Gatchalian asked why PSALM had taken out a loan which he said was “too expensive”.
For a loan of 79 billion pesos over four years, PSALM would have to pay 21.67 pesos in interest, which Gatchalian says is almost a third of the principal amount.
Besido-Garcia said the high interest rate was due to the short duration of the loan, which coincides with the remaining life of the PSALM.
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