Trillanes bill: Tap Malampaya for power subsidy

MANILA, Philippines – A Senate bill aims to give the President legal basis to tap the Malampaya fund to subsidize the biggest power rate hike in Metro Manila.

Senator Antonio Trillanes IV filed on Thursday, December 19, a bill authorizing the use of the fund “to directly subsidize energy consumption of end-users in case of market failure.”

Trillanes said he filed the bill following a Supreme Court decision limiting the use of the fund for energy development and exploitation programs. In November, the Court declared unconstitutional the phrase in Presidential Decree (PD) 910 allowing the use of the fund “and for such other purposes as may hereafter be directed by the President.” (READ: Pork for the President)

Trillanes said the ruling “puts the President in a quandary” on whether or not he can use the fund to subsidize the P4.15 per kilowatt hour increase in the generation charge of the Manila Electric Co (Meralco).

“While I believe the President has the power to allocate the Malampaya Funds for [subsidizing power consumption], I am filing this bill to finally settle the issue once and for all and to promote public interest by amending the more than 3-decade old PD 910,” Trillanes said in a statement on Friday, December 20.

Trillanes’ bill also amends the decree to allow the use of the Malampaya fund to finance the rehabilitation of energy infrastructure in areas damaged by Super Typhoon Yolanda (Haiyan). The world’s most powerful typhoon, Yolanda toppled power lines and infrastructure when it hit the Visayas on November 8.

The senator filed the bill after President Benigno Aquino III said that the Supreme Court ruling bars him from using the Malampaya fund to subsidize the power rate hike, and to repair power and transmission lines toppled by Yolanda.

“I’m still having the lawyers look if it is at all possible to use Malampaya for the purpose of re-establishing all of these distribution lines. But so far, the initial advice is that the latest Supreme Court definition does not allow it,” Aquino said in an interview in Tokyo last week.

The Malampaya fund consists of royalties collected from operations of the Malampaya gas and oil fields in the waters off Palawan province.

Trillanes’ bill is just the latest measure lawmakers and civil society groups are taking in a bid to address the power rate hike, the largest in recent history. (READ: 13 things Meralco consumers should know about the hike)

Meralco is raising charges by P4.15 per kilowatt-hour (kWh) in 3 tranches: P2.41 per kWh in December, P1.21 per kWh in February 2014 and P.053 per kWh in March.

Trillanes is among the senators suspecting there was collusion among power plants that went on simultaneous outages coinciding with the scheduled maintenance shutdown of the Malampaya natural gas field.

The shutdowns forced Meralco to source power from plants that run on diesel, which is more expensive than natural gas.

The Senate, the House of Representatives, the Department of Energy and the Department of Justice are all investigating the power rate hike.

‘Use for consumers, not corruption’

Trillanes and Senate Energy Committee Chairman Sergio “Serge” Osmeña III have called on Aquino to tap the Malampaya Fund for the power rate hike subsidy.

Calling the fund “fat,” Osmeña said there is a balance of more than P130 billion that the President can use for the power subsidy.

 “If the law establishing the Fund (Presidential Decree No. 910) has to be amended, we can do that in two weeks. All the President has to do is to certify the bill for prioritization,” Osmeña said in a statement earlier this month. 

Yet Trillanes’ bill was filed on the day Congress adjourned session for the Christmas holidays.  

Osmeña and Trillanes said it is better for the money to be used to help power consumers instead of being lost in corruption like what happened in the Malampaya Fund scam.

The P900 million allocation of the agrarian reform department from the fund was allegedly siphoned off to fake non-governmental organizations of Janet Lim Napoles in connivance with department officials. Former President Gloria Macapagal-Arroyo and Napoles are among those facing a plunder complaint over the scam.

“It is better to spend the Malampaya Fund to subsidize power rate hikes rather than lose it to PDAF scams,” Osmeña said.

Trillanes is convinced there was collusion and a market failure, and called on the government to step in.

“The effect of this power hike is to diminish an already weak purchasing power of marginalized Filipinos. Thus, finding solutions must be our top-most priority since bickering and misplaced politicking would not ease the burden of our countrymen,” Trillanes said.

High power rates, reviewing industry  

The Philippines has one of the highest power rates in Asia. The recent price hike prompted lawmakers to call for a review of the industry. They said power supply in the country has become unreliable and expensive, contrary to the objectives of a 12-year-old law.

“The EPIRA law is supposed to promote free competition in order that the consumers can benefit from a lower but efficient power generation system. The opposite apparently happened.” – Rappler.com