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Pinutulan! DOF asks 2 electric cooperatives in BARMM to pay P16-B bills

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The Department of Finance (DOF) has ordered two electric cooperatives in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) to immediately settle their over P16 billion unpaid electricity bills.

This as the DOF directed the Power Sector Assets and Liabilities Management Corp. (PSALM) to strictly enforce its credit and collection policy against Maguindanao Electric Cooperative, Inc. (MAGELCO) and Lanao del Sur Electric Cooperative, Inc. (LASURECO).

To bring an end to the ballooning financial obligations of MAGELCO and LASURECO, the DOF has ordered PSALM to commence the curtailment for MAGELCO and disconnection for LASURECO from the Agus 1 Hydroelectric Power Plant starting May 26, 2022.

The DOF explained that PSALM should not give free electricity to MAGELCO and LASURECO because it is not PSALM’s mandate to subsidize electricity costs, and PSALM does not have the budget to do so.

The poor payment performance of MAGELCO and LASURECO has been a long-standing problem, stemming from both cooperatives’ financial mismanagement and low collection efficiency from consumers, the finance department said.

As a consequence, MAGELCO and LASURECO are unable to fully pay their obligations, compelling PSALM to incur more borrowings to cover the ever-widening shortfall.

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