HULI NA NAMAN! San Miguel Co. still owes govt. P24 billion

HULI NA NAMAN! San Miguel Co. still owes govt. P24 billion

San Miguel Corporation (SMC) still owes the government P23.94 billion even if it insists that it has no outstanding debts, this according to the Power Sector Assets and Liabilities Management Corp. (PSALM).

PSALM in a statement refutes SMC the claim of SMC’s South Premiere Power Corp. (SPPC) that it has no payables due to PSALM considering it already remitted P314.6 billion.

PSALM’s billings to SPPC, including the unpaid P23.94 billion, are based on the bid that SMC itself submitted to PSALM in April 2010 during the public bidding conducted for the  Ilijan Independent Power Producer Administration Agreement (IPPAA).
(photo credit to owner)

The terms of the IPPA agreement were fully disclosed to all bidders including SPPC long before said public bidding.
While SPPC’s payments to PSALM have now reached P314.6 billion, PSALM said it is still deficient when payables are computed based on the bid submitted by SMC  and on the IPPAA formula for computing payables.
PSALM said that as of December of 2019, SMC is still short of P23.94 billion.

“It is not fair for SPPC to complain that it has already paid too much to PSALM, or that it needs to pay even more, because these payments are all based on SPPC’s own bid, a business judgement of SPPC that it must honor regardless of any change in circumstances or any impact in its profit margin,” PSALM president and CEO Irene Besido-Garcia said.

SMC in its defense said that it had already paid the amount of P314.6 billion, consisting of P73.9 billion in fixed monthly payments and P240.7 billion in generation charges. The estimated remaining balance for payment to PSALM is at P77.6 billion by the time the agreement expires in 2022. This consists of P23.6 billion in fixed monthly payments and P54 billion in generation charges.

According to SMC, its total paid and unpaid payments to PSALM will amount to P392.2 billion or P97.5 billion in fixed monthly payments and P294.7 billion in generation charges. 

With the payments made as of January, PSALM had already gained P40 billion from the deal.
In 2010, San Miguel took on a “bid-to-win” attitude to clinch the public bidding and become Ilijan’s IPPA. This strategy of San Miguel resulted in financial consequences that the terms of the 2010 public bidding could bot be changed.

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Report from PhilStar

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