Psalm raises P100-B from bank loan syndicate

The Power Sector Assets and Liabilities Management Corp. (Psalm) tapped a P100-billion loan from a syndicate of banks to provide budgetary support and help the state-run company refinance some of its old debts.

The bulk of the credit facility was extended by the state-run Land Bank of the Philippines, which lent P60 billion to Psalm.

LandBank and the Development Bank of the Philippines, another government-owned lender, acted as joint lead arrangers for the syndicated loan deal.

Psalm will use the proceeds to augment its working capital requirements, as well as refinance existing liabilities and settle domestic contractual obligations.

LandBank also said the financing would help Psalm fulfill its mandate. Created through the Electric Power Industry Reform Act of 2001, Psalm is mandated to absorb the assets of National Power Corp. (Napocor) and pay Napocor’s debts, which were recorded at a high of P1.24 trillion in 2023.

Psalm, whose corporate existence will cease in June 2026, has been selling such power assets to settle all the liabilities and obligations it assumed from Napocor.

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Psalm’s total debt had been decreasing year after year, coming from P813.9 billion in 2008, with LandBank providing financing support over the years.

Figures showed that Psalm’s financial obligations—including debts and lease obligations to independent power producers—had gone down to P262.79 billion as of June this year, marking a decrease of P977.81 billion from the 2003 peak. This left the state-run firm with P262.79 billion in outstanding liabilities.