The design of the Power Sector Development Program (PSDP) took into account the lessons learned from previous ADB operations in the power sector. In particular, the preparation of the PSDP benefited from the sector assistance program evaluation of ADB's assistance to the Philippine power sector. On this basis, the PSDP envisaged two subprograms with 2-year time horizons, covering 2007- 2008 and tentatively 2009-2010. Target dates were set only for subprogram 1 to allow flexibility in the overall implementation schedule. The government chose not to pursue subprogram 2 mainly because of the better-than-expected progress of the privatization program, with private sector investments being made without the assistance foreseen under subprogram 2. However, without subprogram 2, the government was able to defer a key policy action that was required for the implementation of the subprogram the introduction of universal charges for stranded debt and cost. As a consequence, the Power Sector Assets and Liabilities Management Corporation (PSALM) could not achieve a debt service coverage ratio (DSCR) of 1.0 in 2009 as required in the policy matrix.
Power Sector Development Program