P34.4B overdue SMC bills
It is quite ironic that SMC harps on the amount it poured into campaigns to respond to the challenges brought by the pandemic when it denies the government of its financial obligations.
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Daily TribuneIt is quite ironic that SMC harps on the amount it poured into campaigns to respond to the challenges brought by the pandemic when it denies the government of its financial obligations.
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In June 2026, state-holding firm Power Sector Assets and Liabilities Management Corp. will terminate its corporate life unless Congress extends it. What will be left in its wake is P34.4 billion in collectibles from Asian conglomerate San Miguel Corp.
The government was not remiss in trying to collect the debt which stemmed from the refusal of SMC unit South Premiere Power Corp. to comply with the terms of its independent power producer administrator contract.
The contract, despite the debt dispute, eventually resulted in SMC's ownership of the country's largest power facility, the 1,200-megawatt Ilijan natural gas plant in Batangas.
Psalm wanted SPPC to base the generation charge it remits to the government on the prices in the Wholesale Electricity Spot Market as provided in the deal, but SPPC insisted that it follows the fixed price under its power supply agreement with Meralco.
PSALM manages financial obligations involving power projects such as lease payments to independent power producers and obligations of electric cooperatives to the National Electrification Administration.
Its corporate life under the provisions of the Electric Power Industry Reform Act expires on 26 June 2026 which is exactly 25 years after the effectivity of EPIRA.
All of its assets and liabilities will revert to the national government when it ceases to exist which means the financial burden will be assumed by taxpayers.
House members in a 2020 probe said SPPC is "depriving the country of what it is due" over the billions of pesos it owed PSALM.
They revealed that SPPC refuses to honor its contract commitments while issuing dividends to its investors of P600 million in 2017 and P2 billion in 2018.
It is quite ironic that SMC harps on the amount it poured into campaigns to respond to the challenges brought by the pandemic when it denies the government of its financial obligations.
PSALM in 2015 sought to end the IPPA with SPPC as its obligations with the government piled up. The collectibles from SPPC then reached P6.46 billion.
SMC sought and obtained a temporary restraining order on the IPPA termination from the Mandaluyong regional trial court, which is a dependable court since it always favors SMC.
The TRO was extended into a preliminary injunction order that had endured for seven years, effectively shackling the government from taking action against SPPC.
Then Leyte 3rd District Rep. Vicente Veloso III, a former Court of Appeals Justice criticized the Mandaluyong City RTC for allegedly usurping the exclusive power of the Energy Regulatory Commission over disputes involving electricity rates.
Since PSALM's corporate life is about to end, the government should ensure that the SPPC debt is collected.
The amount would be useful for programs that would help Filipinos rise again as the health emergency abates, an opportunity that SMC should not deny the government.
