After almost 20 years, lawyer Irene Joy Besido Garcia’s professional calling shifted from advocating the causes of individual clients or corporations to defending the public interest. The Power Sector Assets and Liabilities Management Corporation (PSALM) president and chief executive officer was in private practice for a long time, having started her career with the late great statesman, Senator Raul Roco.
“He (Raul Roco) was a young lawyer then who was working for the ACCRALAW (Angara Abello Concepcion Regala & Cruz Law Offices),” Atty. Garcia recalls. “After the 1986 EDSA Revolution, he formed his own law firm, the Roco Buniag Kapunan Migallos law offices with Attys. Lorna Kapunan and Atty. Barbara Migallos. It was one of the top law firms, and I joined them as a junior associate after I graduated in 1998. I wanted to be part of that firm because they don’t specialize or departmentalize the work. I wanted to be exposed to as many different kinds of law practices possible,” she continues.
Atty. Garcia became a senior associate at the Roco Law Office after two years and was admitted to partnership after four years. When Senator Roco succumbed to cancer, the law firm was dissolved, and the partners went their separate ways.
Along with Atty. Lorna Kapunan, Atty. Garcia established the Kapunan, Lotilla, Garcia & Castillo Law Offices. “We continued the same kind of practice—taking on litigation cases, many of which were controversial. We handled all sorts of cases like taxes, labor, family law, scandals, among others.”
Among Atty. Garcia’s slew of professional achievements, she considers being named senior partner of the Kapunan, Garcia, Castillo Law Offices as one of her greatest. “I was actually managing partner of the law firm before I moved to the public sector. Throughout my career I could say I was fortunate to have handled a lot of interesting cases. Our firm got the first Writ of Kalikasan (a legal remedy under Philippine law that provides protection of one’s constitutional right to a healthy environment and protect and advance the right of human beings to a balanced and healthful ecology) for our work during the oil leak in Makati a few years back. We got the writ at a time when it was still a very new, young concept.” This particular success was probably the start of the University of the Philippines alumna’s career shift to public service.
Atty. Garcia was initially appointed consultant to the Department of Finance (DOF) on power sector matters. In May 2018, she was tapped to lead PSALM, a government agency that functions in three main areas: 1.) privatization of national power’s generation and National Transmission Corporation’s (TransCo) transmission assets; 2.) management of liabilities where it manages all existing debt of national power, capital lease payments to Independent Power Producer (IPPs), and the outstanding obligations of electric coops to the National Electrification Administration (NEA) and other government agencies; and 3.) administration of the Universal Charge collected every month by the distribution utilities from all electric consumers, which according to the lawyer, is “used to finance, as specified by law, missionary electrification, environmental protection projects, and payment of National Power Corporation’s (NPC) stranded debts.”
“So far, it’s been quite exciting in the sense that the work here is very different from what I used to do in the past,” Atty. Garcia shares. “I think, foremost, you’re an advocate for public interest—the best interest of the Filipino people.” Another adjustment, she says, is the shift from being able to charge billable hours to clients to receiving the salary of a public servant “regardless of the magnitude of the problem, the difficulty of the work, and the challenges that you face.”
The change in Atty. Garcia’s career path also coincided with her desire for a modification in her routine. “I was thinking, you know, not all things are about money, compensation, or financial returns,” maintains the mom of three. “And it’s also my way of paying back as a graduate of the University of the Philippines, where I was paying a miniscule tuition fee. I was also partly intrigued by what the position would require of me,” she adds.
PSALM is a government-owned and controlled corporation established after the country experienced a power crisis in the ‘90s. It was a period when the country’s population increase outpaced its capacity to provide energy. “There were no power plants being built so as a reaction to the power crisis, they started aggressively encouraging the private sector to help out by putting up a lot of power plants. This activity was under the NPC.”
Atty. Garcia says that when “NPC started engaging the power sector to come up with build-operate-transfer projects where they would build power plants, the government (ended up) paying for these. The power plants were being built aggressively and NPC became mired in debt because, well, there are certain businesses that are really not, should not, be left to government. It would be more efficient if the private sector does it.”
We will commit to efficiently compute, process, and release the LGU’s share. We will do it efficiently so that they can, in turn, use the proceeds to fund their local government projects.
As a response to the problems, Congress began discussions on the Electric Power Industry Reform Act (EPIRA). “They created PSALM, and the idea behind its existence is to create a corporation to absorb the liabilities and assets of the NPC. It was formed to privatize, liquidate, and absorb NPC assets as well as sell and privatize in an optimal manner its assets and from the proceeds of those privatization efforts, pay off the obligations of government,” explains Atty. Garcia.
Key to PSALM’s task is liability management. “This means looking at your current cash and comparing it to the obligations of the NPC,” states Atty. Garcia. “You think of how to absorb the cost of money. If you will pay in cash or if you need to borrow money and what costs should be passed on to the public, PSALM assumes all the assets and liabilities of NPC. And then of course, at the end of the day, the objective is to fully pay off all the obligations without having to burden the national government with the task,” the attorney elaborates.
PSALM’s mandate is limited by a 25-year lifespan. “We started operations in 2001; our end of life is 2026. It would be interesting to let you know that the total obligation we actually inherited is P1.24 trillion,” she reveals.
The ideal scenario for the PSALM is to be able to fully pay off all of NPC’s obligations. “The worst-case scenario is that there will be obligations to pass to the national government. But if there’s no more debt, then that’s good news,” Atty. Garcia posits.
One of the many challenges PSALM faces is how “to internally generate as much privatization proceeds as possible so that we can pay off the NPC obligations within our remaining eight years,” Atty. Garcia points out. As it strives to do this, the agency deals with depreciating assets, maturing obligations, and lag in privatization that can constrain the agency to borrow from the bank and deal with interest costs as well.
“The longer we delay paying all these obligations, the more expensive it becomes for the Filipino people because there is that cost for borrowing,” says Atty. Garcia. “You have to be efficient in raising funds so that you can pay off as many obligations as possible, so you will need to borrow less,” she adds.
PSALM AND LGUS
As the owner of many real estate properties and power plants, PSALM works with local government units (LGUs) in getting permits and paying property taxes for these. “There is what we call share of the local government in the proceeds of generating power, where a percentage of the sales of operating power plants goes to the host community,” Atty. Garcia says. To improve the process, President Rodrigo Duterte recently released directives to reduce the red tape involved in giving communities their share of the profit. The new system will no longer involve the Department of Energy (DOE) in giving payments out and will enable PSALM to directly pay LGUs. “We are just waiting for the specific rulings on how to do it,” she reports. “We need to do direct remittance and the LGUs will be our points of contact.”
Atty. Garcia adds that the coordination efforts between PSALM and LGUs will be useful in terms of compliance with the computation of the real property taxes. The agency depends on presidential executive orders for preferential rates for real property taxes. This process involves post-assessments where, Atty. Garcia shares, one of their challenges involves paying the assessed amounts given by LGUs “based on the rates of everyone else.” This causes PSALM’s cost and the burden to the public to become bigger.
“We can help each other. I hope they can give us time and wait for the executive order on the preferential rate to be released. We will pay you what we owe you” Atty. Garcia assures. “We will commit to efficiently compute, process, and release the LGU share. We will do it efficiently so that they can, in turn, use the proceeds to fund their local government projects.”
The PSALM head says she is happy to have successfully approved several restructuring agreements as these are aligned to her goal of aggressively focusing efforts to collect the receivables. One of these is an agreement with electricity cooperative SURECO II, where they were able to raise around P506 million. With KA-SURECO III, the agency targets to collect P584 million, and with NPC Alliance Corp. collectibles are estimated at P900 million. Under her leadership, PSALM is “trying to aggressively support bills in Congress that would help generate other sources of revenues that will help us pay the obligation so that we don’t have to keep passing on to electricity consumers.”
Teamwork, Atty. Garcia says, is vital in their task “to focus our energies in trying to collect all these receivables and we have thus far successfully collected amounts that we have thought, initially, that we would not be able to collect.”
The lawyer espouses leadership by example. “That’s number one to me. They have to see that I’m working hard. I’m getting my hands dirty; I’m hands on. That should encourage them to also work hard and give their 101 percent best. My other leadership trait is that I’m always, always within reach. I’m always approachable.”
Atty. Garcia says, “(Despite being) an organization of 300 people and I’m the president and CEO, one of the things that I always mention during meetings with the employees is that I never close my door. Regardless of rank, they can come to me and don’t have to set up an appointment.”
“If I’m here and if you have something to say to me, you shouldn’t be afraid to enter my office and talk to me. I want to always be available if there are problems, concerns on the part of the employees because I feel that it’s also important that their concerns are addressed for them to be efficient in their work,” asserts Atty. Garcia.
“I only subscribe to a very few clichés. It’s important that aside from hard work, there is transparency and integrity in what you do especially if you’re in the public sector. Public office is a public trust. I think it’s also important to realize that not everybody is given the chance to work in a place that allows you to leave an impact on the lives of the Filipino people,” Atty. Garcia says.
At the end of the day, what gives Atty. Irene Joy Besido Garcia the most satisfaction is just that—being able to contribute to making the lives of people even just a little bit better. That is something that she can truly push forward and be happy about. — JOYCE REYES-AGUILA