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Corporate Philosophy

After emerging from the crippling power crisis that occurred in the early 1990s, the Philippine
government embarked on an industry privatization and restructuring program envisioned to ensure
the adequate supply of electricity to energize its developing economy. This restructuring scheme is
embodied in Republic Act No. 9136, the Electric Power Industry Reform Act (EPIRA).

Enacted on 08 June 2001 the EPIRA seeks to ensure quality, reliable, secure and affordable electric
power supply; encourage free and fair competition; enhance the inflow of private capital; and
broaden the ownership base of power generation, transmission and distribution. The EPIRA
restructured the power industry by organizing it into four sectors: generation, transmission,
distribution, and supply; and introducing the following major reforms:

1. restructuring of the entire power industry to introduce competition in the generation sector;

2. change from government to private ownership through privatization; and

3. introduction of a stable regulatory framework for the electricity sector.

In implementing the restructuring of the power sector, the EPIRA created the Power Sector Assets and
Liabilities Management (PSALM) Corporation, a wholly-owned and -controlled government entity, to
take over the ownership of all existing generation assets of the National Power Corporation (NPC),
independent power producer (IPP) contracts, real estate, and all other disposable assets including the
transmission business of the National Transmission Corporation. By the same token, PSALM assumed
all outstanding obligations of NPC arising from loans, issuances of bonds, securities, and other
instruments of indebtedness. The principal purpose of PSALM, as mandated by the EPIRA, is to
manage the orderly sale and privatization of these assets with the objective of liquidating all of NPC's
financial obligations in an optimal manner.

Formally established on 26 June 2001, PSALM began operations on 01 July 2001 with the following
 Structure the sale, privatization or disposition of NPC assets and IPP contracts and/or their
energy output based on such terms and conditions that will optimize the value and sale prices
of these assets;

 Liquidate NPC's stranded contract costs using proceeds from sales and other properties,
including proceeds from the Universal Charge;

 Restructure existing loans of NPC; and

 Collect, administer and apply the NPC portion of the Universal Charge.

The successful privatization of these assets will pave the way for the declaration of open access and
retail competition as the EPIRA has conditioned it on the existence of at least 70% of the total capacity
of generating assets of NPC and of the total capacity of the power plants under contract with NPC in
Luzon and Visayas.

Moreover, to strengthen the financial viability of electric cooperatives (ECs), PSALM assumed all their
outstanding financial obligations to the National Electrification Administration and other government

PSALM has 25 years from the effectivity of the EPIRA to fulfill its twin mandates unless otherwise
extended by law. After the end of its corporate life, all assets it holds, all moneys and properties
belonging to it, and all its outstanding liabilities will revert to and be assumed by the national

PSALM Integrated Management Staff Policy

"Quality is our Policy"

We are a quality-oriented and socially-responsible government institution committed to satisfying the

requirements of stakeholders through exemplary services.


"A debt-free PSALM towards a competitive electric power industry through strategic asset
privatization and financial management."

 Ensure the orderly privatization of PSALM's power and other disposable assets

 Optimally liquidate PSALM's financial obligations

 Efficiently administer the Universal Charge


The principal purpose of PSALM is to manage the orderly sale, disposition, and privatization of NPC
generation assets, real estate and other disposable assets, and IPP contracts with the objective of
liquidating all NPC financial obligations and stranded contract costs in an optimal manner.

Core Values

 Professionalism

 Respect

 Excellence

 Teamwork

 Transparency

 Integrity
Privatization of National Power's Generation and TransCo's Transmission Assets

PSALM undertakes a range of activities preparatory to the bid proper, including drafting information
memoranda and transaction documents to be distributed to prospective bidders. PSALM also conducts
due diligence on its assets to determine their readiness for privatization.

The publication of the Invitation to Bid officially begins the bidding process. The notice also indicates
schedules of the pre-bid conference, the start of the conduct of due diligence by the bidders, the
distribution of the final transaction documents, and the date for opening of bids.

PSALM will also appoint, again through public bidding, IPP (independent power producer) administrators
who will manage the energy output of different portfolios of power plants run by IPPs. These IPPs were
contracted in the 1990s by National Power to meet the country's growing electricity requirements.

Liability Management

PSALM manages all existing debt of National Power, capital lease payments to IPPs, and the outstanding
obligations of electric coops to the National Electrification Administration and other government
agencies. This function includes the management of other liabilities assumed by PSALM as well as its
future borrowings. This is to ensure that PSALM will be able to pay all principal and interest payments as
they fall due. Refinancing, whenever necessary, will be obtained at minimum cost. PSALM's liability
management function also requires the mitigation of foreign exchange risks through hedging or other
means since some of the debt are denominated in foreign currency.

Administration of Universal Charge

PSALM, with the supervision and approval of the ERC, administers the collection of the Universal Charge
(UC), which is collected every month by the distribution utilities from all electric consumers. The UC
fund is used to finance, as specified by law, missionary electrification, environmental protection
projects, and payment of National Power's stranded debts.
The Organization: Leadership

PSALM Board of Directors

The Secretary of Finance acts as the chairman of the PSALM Board of Directors, with the Secretary of
Energy, Secretary of Budget and Management, the Director-General of Socio-Economic Planning, the
Secretary of Justice, the Secretary of Trade and Industry and the President of PSALM as ex-officio

While PSALM has its own Board of Directors and set of corporate officers, it reports to the Department
of Energy (DOE) which directly supervises all energy related programs, projects and activities, including
the restructuring of the electricity industry.


Department of Finance

Department of Energy

Department of Budget and Management

National Economic and Development Authority
Department of Justice

Department of Trade and Industry

Power Sector Assets & Liabilities Management Corporation

PSALM Management Team

Appointed by the President of the Philippines, the PSALM President, who is also the Chief Executive
Officer of the corporation,heads the PSALM Management Team. The President represents the
Corporation in all dealings and transactions with the local and national government, public and private
companies, the media, and the general public.


Vice President, Asset Management


Officer-in-Charge, Finance

Officer-in-Charge, Office of the General Counsel

Vice President, Corporate Social Responsibility
The Organization: Functional Groups
PSALM is divided into five functional groups namely:

Office of the President and CEO (OPCEO)

The OP is headed by the PSALM President and Chief Executive Officer (CEO) who assumes accountability
for the overall performance of the Corporation to the President of the Philippines, the DOE, the PSALM
Board and the public. It oversees the formulation, development, implementation and monitoring of
corporate strategic and operational/action plans in accordance with the charter, the legislative agenda
and its business viability.

Asset Management Group (AMG)

The AMG, headed by a Vice President, exercises direct supervision and control over asset valuation and
disposal, electricity trading, IPP/IPPA contract administration and asset operations monitoring and
maintenance. The AMG takes the lead in the privatization and management of assets from asset
preparation, packaging, conduct of bidding, award of contract and contract monitoring to the trading of
electricity output of the NPC-contracted capacities in the electricity spot market. AMG’s functions on the
operation and maintenance of generation assets through the NPC include the formulation and setting of
plant performance evaluation standards/targets/measures, conduct of plant audit, and the monitoring
and assessment of plant performance with respect to agreed upon standards and targets.

Finance Group (FG)

The Finance Group, headed by a Vice President, manages and safeguards the Corporation’s financial
resources and obligations. It is in charge of developing and maintaining an effective and efficient
accounting system for the Corporation, prepares the financial statements, financial management
reports, financial research and analysis, fund management and other treasury-related matters, and, UC
administration. It also oversees the formulation, evaluation, and implementation of financing plans,
policies, transactions, and instruments to efficiently manage PSALM’s liabilities and risks, as well as the
development of financial valuation for generation assets, and the application and administration of
generation tariff and UC-SCC and SD.

Office of the General Counsel (OGC)

The OGC is headed by a Vice President who will also be PSALM’s General Counsel. This Group handles all
legal transactions arising from the privatization process, restructuring of the electricity industry, asset
rights and titling, and implementation of the EPIRA. It also provides legal advice to, among others,
management contracts, taxation, litigation and other internal services essential to the operation of

Corporate Social Responsibility Group (CSRG)

The CSRG, with a Vice President as its head, implements programs in line with the corporate mission
towards caring for the environment and the affected communities where the generating plants are
located. It formulates advocacy campaigns to promote public awareness on matters related to the
operations of PSALM.
Collectively, the heads of the five (5) functional groups comprise PSALM’s Management Committee