• Malampaya funds probe should be even-handed


    There is urgency in the call of the Special Audits Office of the Commission on Audit (CoA) to investigate officials liable for irregularities in the release of P38.8 billion of government earnings from the proceeds of the Malampaya natural gas project off Palawan.

    But the probe should be an even-handed one, given the legal context in which the money had been disbursed.

    The audit report, dated August 31 but released to the public only this week, concludes that the Malampaya funds have not served their purpose, which was for “energy resource development and exploitation,” as mandated by the Marcos-era Presidential Decree (PD) 910.

    Instead, it became a pork-barrel fund of sorts for various national government agencies, as well as the provincial government of Palawan, where off its shores the Malampaya project was built.

    To recall, the Malampaya funds represent the government’s 60-percent share in the net operating proceeds of the Malampaya Deep Water Gas-to-Power Project, which supplies fuel to three power plants in Batangas and provides 30 percent of Luzon’s electricity needs.

    Between 2002 and 2013, the government collected a total of P173.3 billion in Malampaya proceeds, of which 22 percent or P38.8 billion was released to various national government agencies, government corporations and the Palawan provincial government.

    CoA claims “[t]he very purpose for which [the]Malampaya Fund was established is…yet to be served,” presenting a list of projects not directly involving energy resource development and exploitation.

    But the funds were released just the same because PD 910 also allowed the money to be used “for such other purposes as may be hereafter directed by the President.”

    It was, thus, unclear why the CoA Special Audits Office questioned the rationale of the Malampaya fund releases, because that all-encompassing provision of PD 910 was unfortunately the law of the land, until 2013, when that phrase “for such other purposes as may be hereafter directed by the President” was declared unconstitutional by a Supreme Court ruling.

    That was why the Malampaya funds were used for roads, school buildings and barangay (village) projects in Palawan, as well as to augment the Philippine National Police’s “operational and logistical requirements in the search, retrieval, rescue, relief and rehabilitation efforts in areas affected by calamities nationwide.”

    Malampaya funds were also used to acquire a US vessel to protect the natural gas project, and for the “Pantawid Pasada” fuel subsidies for transport groups.

    But there were instances of Malampaya fund releases that should be rightfully investigated for irregularities in their documentation, such as, when there were no requests or any endorsement from the Department of Energy, or a Department of Budget and Management evaluation, or approval by the President.

    “In some cases, funds were released even in the absence of project proposals, or for purposes other than the purpose for which the fund was approved for release by the President,” the CoA report said.

    As we have said earlier, there is urgency to this probe given the fact that Malampaya is expected to run out of natural gas by 2022.

    That is only five years away, and there has never been a serious attempt at exploring other oil and gas-rich areas to find a replacement despite the abundance of financial resources for it. New efforts toward that direction should start as soon as possible, and those responsible for the Malampaya funds’ misuse must be held accountable.


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