Where is P70 B inMalampayafunds, DOE and DBM asked

By Jason de Asis


Manila, October 28, 2010-Sen. Ralph G. Recto, chair of the Senate ways and means committee, asked the Department of Energy (DOE) and theDepartment of Budget and Management (DBM), for the full accounting of the proceeds of the earnings from the Malampaya Deep Water Gas-to-Power Project.


Recto said that the real status of the Malampaya funds, including its whereabouts, the disbursements in its name and the sharing mechanism between the government and its private sector operator, remain a mystery despite an earlier call for a full disclosure of all its transactions.


“It is necessary to clarify who is really liable to pay the taxes assessed against the income of the gas project,” he said, adding that the government should justify why the income taxes amounting to over P50 billion were deducted from its share in the proceeds of the project and not on the share of the service contractor.


It was bared that the national government share in the joint undertaking amounted to some P90 billion, some P20 billion of which has already been disbursed while the rest has been said to have already been forwarded to the National Treasury, in a recent budget hearing of the DOE at the Senate.


The Commission on Audit (COA) questioned the deduction of corporate income taxes of the service contractors from the 60% government share in the project, which amounted to P53,140,304,739.86 wherein the service contractors in the project are Shell Exploration B.V., Shell Philippines LLC, Chevron Malampaya LLC and PNOC-Exploration Corporation.


Recto earlier asked the DOE and DBM to explain the P20-billion disbursement from the fund; however, he stressed that there might be a need to organize a search team for the balance of P70 billion, whose whereabouts have yet to be ascertained.


He is now inquiring into the whereabouts of the remaining P70 billion of the Malampaya funds, as the propriety of the releases remained unclear, asking if this has been used up or if this is deposited in a special account.


“The DBM must explain the process by which these kinds of funds are kept and what the government does with its interest income,” Recto said, adding that P70 billion is a lot of money which earns interest income. The people have the right to know where and how these funds are used, he said.


He added that it is also the people's right to know if the P20 billion disbursements from the Malampaya Fund were legally made.


A total of P1 billion had been released to the Armed Forces of the Philippines Modernization Fund, while P2.14 billion had been disbursed to the Department of Interior and Local Government–Philippine National Police, based on the documents submitted by the DOE during its budget hearing at the Senate.


Disbursements covering P5.82 billion was made to the Department of Agriculture, P3.55 billion to theDepartment of Public Works and Highways, P1.39 billion to the Department of Finance, P198 million tont of National Defense, P50 million to the Philippine Coast Guard, P745 million to the Department of Health, P900 million to the Department of Agrarian Reform, and P400,000 to PAGASA, and a total of P3.9 billion has been released to the local government of Palawan.



The fund for the Malampaya project needs to be dealt with as the government is desperately looking for cash to fund the rehabilitation and reconstruction of destroyed farmlands and government infrastructure in affected areas of the recent supertyphoon.


“As I have said before on these kinds of funds, use it or lose it. If there is such a sum of money lyingaround somewhere, then the government should be able to make use of it for the benefit of the people," he said. (Jason de Asis)