EO 59 (s. 2018) — Adjusting PSALM Dividend Rate to 3.3% for Selected Years
Full title: Adjusting the Dividend Rate of the Power Sector Assets and Liabilities Management Corporation Pursuant to Section 5 of Republic Act No. 7656
Signed: July 25, 2018 | President: Rodrigo Roa Duterte
Context
RA 7656 requires all GOCCs to declare and remit at least 50% of annual net earnings as dividends to the National Government. However, §5 of RA 7656 grants the President authority to adjust this percentage on the recommendation of the Finance Secretary, in the interest of national economy and general welfare.
PSALM’s liquidity and debt servicing obligations — inherited from the NPC restructuring under RA 9136 (EPIRA) — were cited as the basis for downward adjustment [EO 59, s. 2018, WHEREAS ¶3, 2018-07-25]. The DOF Secretary recommended the adjustment [EO 59, s. 2018, WHEREAS ¶4, 2018-07-25].
Key Provisions
§1 — Adjusted rate: PSALM’s dividend to the National Government is reduced from 50% to 3.3030407% of net earnings — approximately ₱2.11 billion in total — for calendar years 2004, 2007, 2008, 2013, 2014, and 2015 [EO 59, s. 2018, §1, 2018-07-25].
§2 — Scope: Adjustment applies only to the specified years; not a general or permanent rate change [EO 59, s. 2018, §2, 2018-07-25].
Policy Notes
- The downward adjustment (from 50% to ~3.3%) reflects PSALM’s massive inherited financial obligations: PSALM carries ₱505 billion in stranded debt from NPC’s privatization under EPIRA, serviced through UC-StC collections
- Covers years spanning both the GMA era (2004, 2007, 2008) and Aquino III era (2013–2015), suggesting this was a retroactive settlement of dividend obligations that PSALM could not have met at the time
- This is not a forgiveness of debt — it is a retroactive adjustment of the dividend rate for specific years, with the balance effectively retained by PSALM for debt servicing
- See Power Sector Assets and Liabilities Management Corporation (PSALM) for full PSALM mandate and stranded cost context
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