Power Sector Assets and Liabilities Management Corp. chaired by Finance Secretary Carlos Dominguez III sent a final demand letter to the Olongapo City government to pay long-overdue obligations amounting to P6.713 billion in electricity bills and other charges over a 12-year period.
PSALM president and chief executive Irene Besido Garcia and acting vice president for finance Manuel Marcos Villalon II gave Olongapo City in a letter seven calendar days to pay the arrears or face legal action.
PSALM addressed its formal and final demand letter to Olongapo City Mayor Rolen Paulino for obligations of the city’s Public Utilities Department amounting to P6.713 billion as of July 31, 2020.
Garcia and Villalon told Paulino that PSALM would be constrained “to avail of all appropriate legal remedies to protect PSALM and the government’s interests, including the filing of criminal, civil and administrative cases” against him and other local government officials of the city, if the Olongapo City government fails to pay the “demanded overdue amount within the prescribed period.”
Copies of the final demand letter were furnished Dominguez, Energy Secretary Alfonso Cusi and DILG Secretary Eduardo Año.
PSALM said the local government unit incurred the following long-due obligations: power bills with interest and value-added tax amounting to P5.66 billion; default wholesale supplier arrangement charges with interest and VAT, P813.77 million; deferred accounting adjustment charges with interest and VAT, P230.71 million; and VAT on the automatic cost recovery mechanism true up, P8.72 million.
PSALM first sent a final demand letter to the city government in May 2019, with the arrears then amounting to P6.18 billion, which remained unpaid for more than nine years. The LGU responded by remitting P20 million in July and December last year, leaving a still substantial amount of arrears unpaid.
It said that as of July this year, the city government’s arrears ballooned to P6.713 billion and would continue to increase if it remained unpaid.
PSALM documents show that it sent its first of a series of final demand letters to Olongapo City in April 2012, when the LGU’s arrears amounted to only P3.58 billion.