Energy liabilities reach P932B
The total financial obligations incurred by the government energy sector has ballooned to P932.21 billion ($20 billion), Energy Secretary Jose Rene Almendras said yesterday.
Almendras, briefing the House committee on energy, said the total obligation is made up of directs debts of attached agencies and contingent liabilities.
He said that as of June 10, the combined debt incurred by the National Power Corp., the Power Sector Assets and Liabilities Management Corp., and the National Transmission Corp. was at P765.12 billion.
Non-debt obligations of the attached agencies, he said, were at P167.09 billion.
"It’s a combination of loans and contingent liabilities. The reason why I want to look at contingent liabilities is because we’re trying to do balance sheet engineering. How much do we need to pay so we can project toward the future on how to answer it."
"NPC has liabilities other than loans. Transco has contingent liabilities in many other things. I’m trying to get the dimension cost, so we can talk about exactly what we’re going to do," he added.
Non-debt obligations include pending contracts and cases by attached agencies.
Talks are on going between the Department of Energy and Department of Finance regarding the possibility of the national government absorbing part of the obligations of the energy sector, Almendras said.
He said about half of these obligations could be recovered through an increase in the universal charge.
"You’re not allowed to recover all of it through (universal charge). That means government will have to borrow and we’ll have to pay for it through budget allocations," he said.
The universal charge is imposed on all electricity end-users for missionary electrification; payment for stranded debts and stranded contract costs; environmental charge for watershed rehabilitation and management; equalization of taxes and royalties applied to indigenous or renewable sources of energy vis-à-vis imported energy fuels, and charge to account for all forms of cross-subsidies.
This charge is collected from all end-users every month by Transco (now the National Grid Corporation of the Philippines) and distribution utilities, and is remitted to PSALM every 15th of the following month.
Almendras said the DOE is also in talks with the DOF to spread the recovery period for the settling of the obligations. He said that based on his analysis, it would take at least 25 years to settle the total obligations of the energy sector.
"Can you imagine the amount of strain you will put on the national budget if I have to pay $20 billion in five years’ time. That’s going to eat up in your debt caps. You government borrowing limit is going to be violated. If you stagger it, if you stretch it out, then it makes more," he said.
Almedras said that the total liabilities of PSALM were at P785.09 billion.
Liabilities of the NPC were at P47.97 billion, while those of Transco were at P99.15 billion, he said. - John Poquiz
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