Solons propose bill for transparent disbursement of Malampaya fund

Published August 23, 2018, 10:31 AM

by iManila Developer

By Charissa Luci-Atienza

Lawmakers are proposing to allocate the net national government share from the Malampaya natural gas project to lower the cost of electricity and provide “substantial relief” to power consumers and to ensure the transparent and proper disbursement of the fund.

The Joint Session of the Senate and the House of Representatives on the extension of Martial Law in Mindanao commences in the Plenary of the Batasang Pambansa on December 13, 2017. (ALVIN KASIBAN / MANILA BULLETIN)

Marinduque Rep. Lord Allan Jay Velasco, chairman of the House Committee on Energy, and his panel vice chairman, 1st Consumers Alliance for Rural Energy, Inc. (1-CARE) partylist Rep. Ramon Uybarreta filed House Bill 8082 that will seek to mandate the allocation of the fund to lower power costs and should be clearly provided for in the General Appropriations Act to ensure transparency in the fund utilization.

“The utilization of the Malampaya fund is currently not under scrutiny in the budget process. To make the disbursement of the Malampaya fund transparent and free from abuse, this bill seeks to allocate the net national government share from the Malampaya project to pay the National Power Corporation’s Stranded Contract Costs (SCC) and Stranded debts portion of the Universal Charge, ” Velasco and Uybarreta said.

Under the Electric Power Industry Reform Act (EPIRA), a universal charge (UC) will be imposed on all electricity end-users to cover payment of NPC’s stranded debt and stranded contract costs.

Velasco said the bill would provide substantial relief to power consumers in light of the decisions promulgated by the Energy Regulatory Commission (ERC) to setting the UC for the recovery of NPC’s SCC. “Instead of using Malampaya fund to finance non-energy related programs and projects of national government agencies, the fund would now directly benefit power consumers,” he said.

The Malampaya project is a joint undertaking of the national government and the private sector represented by Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture partners Chevron Malampaya LLC and the PNOC Exploration Corporation.

The project was expected to provide 2,700 megawatts of power or substantial long-term revenue of some US$10 billion to the Philippine government for a period of 20 years starting June 2002.

The Bureau of Treasury reported that the Malampaya fund posted a total revenue collection of P224.34 billion since 2002 and an oustanding balance of P182.29 billion as of June 22, 2016.

For fiscal year 2016, the revenue estimate from the Malampaya project is P27.15 billion, with a proposed expenditure of only P1.04 billion.

House Bill 8082 provides that the net national government share from the Malampaya fund shall be remitted to a Special Trust Fund to be administered by the Power Sector Assets and Liabilities Management Corporation (PSALM)

The measure tasks the Department of Budget and Management (DBM) to provide a timely release of the amounts allocated and appropriated to PSALM in accordance with its debt and independent power producer payment schedule.

It mandates the Department of Energy (DOE), Department of Finance (DOF), DBM and the PSALM to provide the necessary rules and regulations for the proper disposition of the funds and the effective implementation of the proposed Act.