A Philippine senator on Monday warned that the government would be forced to assume billions of pesos in debt if the corporate life of the Power Sector Assets and Liabilities Management (PSALM) Corporation is not extended.
Senator Mark Villar, chairperson of the Senate Committee on Government Corporations and Public Enterprises, stressed the need to prolong PSALM’s corporate life to settle its outstanding financial obligations.
“If we do not give PSALM sufficient time to settle its obligations, it will have a huge domino effect on government funds,” Villar said during a panel hearing on proposed measures to extend PSALM’s corporate life and powers.
Villar also warned that reallocation of funding for critical development projects would be necessary to avoid potential legal issues if PSALM were to be replaced by another entity.
Three separate bills, introduced by Senators Joseph Victor “JV” Ejercito, Raffy Tulfo, and Villar, propose extending PSALM’s corporate life by another 25 years.
The proposed extension is seen as crucial in preventing the government from assuming PSALM’s outstanding financial obligations, which could have significant implications for the country’s finances.
The Senate committee is currently reviewing the proposed measures, which aim to provide PSALM with sufficient time to settle its obligations and avoid any potential disruptions to the country’s power sector.
