MANILA - The civil society group Freedom from Debt Coalition on Thursday called on senators to junk a bill extending the life of the Power Sector Assets and Liabilities Management (PSALM) Corp..
The movement believes that instead of making electricity consumers' lives easier, PSALM has not done anything.
"PSALM Corp. failed to drastically reduce Napocor's (National Power Corporation) debts and electricity rates. The still huge Napocor debt is being passed on to consumers through the universal charge. Worse, it has this callous practice of giving huge incentives and bonuses to its executives and employees," the group said in a statement.
The group added that the Senate must instead push for a review of Napocor's contracts with various foreign and local independent power producers.
PSALM was created through the Electric Power Industry Reform Act to "manage the orderly sale, disposition, and privatization" of the Napocor's assets and contracts with power producers to take care of its financial obligations and stranded contract costs .
It is supposed to last for 25 years. Senate Bill 3250 by Sen. Sergio Osmeña III extends it for another 10 years.
Osmeña, who held a hearing on the bill on Thursday, stressed the need to extend PSALM's life.
He said that in the end, consumers will benefit from lower electricty costs because PSALM would have more time paying for Napocor's debts.
"The longer you stretch out the payment period, the lower it will be on a per kilowatt hour basis," Osmeña told reprters.
He added that this can prevent rate increases.
"The only way we can bring it down is by getting a long-term loan. The only way of getting a long-term loan is to tell the banks that PSALM will still be in business 25 years from now," Osmeña said.