Recto: Change law on Malampaya fund use

MANILA, Philippines – Senator Ralph Recto does not want the President to be able to dictate how to use the multi-billion-peso Malampaya fund.

The lawmaker on Thursday, October 10, pushed for an amendment to Presidential Decree (PD) 910, which allows the Malampaya fund to be used for other than energy-related projects, no thanks to the phrase “and for such other purposes as may be hereafter directed by the President.”

“Malampaya collections are very large and will get larger. There are many questions on its uses,” Recto said in a statement. “Better we amend the PD now and decide the best way to utilize this resource to benefit our people and institutionalize it’s proper use so that whoever becomes President cannot abuse it.”

At least one other senator, Senator Miriam Defensor-Santiago, has expressed the same concern. On Tuesday, in oral arguments at the Supreme Court, Senior Associate Justice Antonio Carpio said that the executive’s use of the Malampaya fund for purposes not specified by Congress is “unconstitutional on its face.”

The fund comes from the Malampaya natural gas project that has been operating off the shores of Palawan for 13 years. It is the single biggest investment in the Philippines, with proceeds amounting to P170 billion over the years.

Less than P25 billion was spent during the Arroyo administration, while P15 billion has been used under President Benigno Aquino III.

Malacañang under President Gloria Macapagal Arroyo invoked former President Ferdinand Marcos’ PD 910 to utilize the Malampaya proceeds for a wide range of projects – from agriculture to defense.

Just last week, a plunder case was filed against Arroyo for the alleged misuse of P900 million from the fund released to the agrarian reform department. The Aquino administration meanwhile, has maintained it has only used the Malampaya fund strictly for energy-related purposes. READ: Aquino’s use of the Malampaya Fund

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Recto also questioned why the P137 billion available from the Malampaya fund, which the National Treasury said is “intact,” is not being used by the government.

“Malampaya cash collections are deposited to general fund which is used for cash requirements implementing the GAA (General Appropriations Act). It is not deposited to a trust fund like the President’s Social Fund, which earns interest…. Why are we not spending it? Don’t we have a mechanism like Disbursement Acceleration Program?” he said.

Earlier, Recto said he was told by the DBM the P137 billion in cash did not exist, but Treasurer Rosalia de Leon on Wednesday said the money is stored under a Special Account in the General Fund called Fund Code 151.

Recto showed the 2011 letter from Budget Secretary Butch Abad that was the basis of his comment.

In the letter, Abad said “for every supplemental disbursement charged against the Malampaya fund which is not within the approved annual fiscal and expenditure programs, the Bureau of Treasury will have to borrow cash to finance the said disbursement.”

“This disbursement is ‘over-and-above’ the annual expenditure program and is ‘deficit-creating,’ unless these are offset against other programmed expenditures. In other words, there’s no P79.48-billion in cash sitting in any bank and ready to be used by the government at any time,” Abad continued, referring to the amount in the Malampaya fund then.

As of 2012, the Malampaya fund had been tapped to fund projects under various agencies, including the departments of the interior, public works, agriculture, defense, finance, and health.

The government expects royalties of up to $10 billion from Malampaya’s 20-year operations. – with a report from Natashya Gutierrez/Rappler.com