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CoA silent on Aquino’s misuse of Malampaya funds

Bayan Muna Rep. Neri Colmenares yesterday questioned the Commission on Audit (CoA)’s deafening silence on President Aquino’s misuse of Malampaya funds, as the CoA insists only on just focusing on the fund misuse during the term of former President now Pampanga Rep. Gloria Macapagal-Arroyo.

The same was done by the CoA on the special audit report on the pork barrel, focusing only on the Janet Lim Napoles’ non-government organizations (NGOs) and the opposition senators and congressmen, while Aquino’s allies were spared from the CoA audit, which covered only the years 2-007-2009, under the term of Gloria Arroyo.
The partylist congressman based his observation from two documents he had obtained from the CoA itself and the Department of Energy (DoE).
The first document is a memorandum from CoA Chairman Grace Pulido-Tan dated June 27, 2011 to all CoA cluster directors, national and local government sectors, regional directors, supervising auditors and audit team leaders with the subject of auditing of funds released to the different national and local government agencies chargeable against the DoE-Malampaya Funds.

The second document is the DoE report on the state of Malampaya funds from June 30, 2010-June 30, 2013.
“Based on the CoA memo, the Malampaya special report is just from 2006 to Dec. 31, 2010 which is essentially only during the term of former President Gloria Macapagal-Arroyo but the annexes only show the disbursements up to December 2009,” said Colmenares.
Of the fund disbursement, Colmenares said the Department of Public Works and Highways (DPWH) had the highest allotment at P7,073,806,659.00 with the Province of Palawan getting P3,958,508,492.51 out of the P23,601,594,569.51 disbursed for 12 government agencies.
“On the DoE report however for 2010 a total of P3,593,750,000.00 was disbursed from the Malamapaya with the DPWH still at the top and the Department of Budget and Management(DBM) and the Department of Finance (DoF) following it.
“While in 2011, a total of P13,266,555,424.00 was spent with the Armed Forces of the Philippines (AFP) and DoF as the biggest spenders.”
In 2012, the total disbursement for the Malampaya fund was P1,988,861,066.00 with the Department of Defense (DND) and the DoF as the only two agencies that accessed it,” said the senior deputy minority leader.
“But why has the CoA report not touched on the disbursement of the Malampaya funds under the present administration?,” the solon asked.
“We are urging the CoA to do a special and comprehensive report on the Malampaya funds from the start to the present and not a selective one. The Filipino people deserve to see the whole picture,” said Colmenares.
Aquino has spent a total of P15,255,416,490 since 2011 that was taken from the Malampaya Special Funds, a royalty share of the government from the natural gas operation of the Malampaya Gas Natural Project, according to the Palace.
Presidential deputy spokesman Abigail Valte claimed yesterday the expenditures of President Aquino using the Malampaya Special Funds, a fund that is not included in the annual allocated budget to the President.
“I understand that you were speaking about Malampaya yesterday, the total number of sorry, the total amount for all the projects, there have been 10 projects funded, sourced from the Malampaya funds since the President took over on July 1, 30, 2010.
“So in 2011 this was the first or obtained from the funds of Malampaya and since then, 10 were the funded projects from it. The total cost of was P15,255,416,490,” Valte said.
Valte itemized the 10 projects acquired by Aquino that took them eight months before being able to explain how the funds had been disposed and to what projects.
“Ten projects, we mentioned theses before. The fuel requirement for (the) Napocor, the Small Power Utilities. All of these are energy-related. Number two and numbe three, for the public transport assistance program or what we all know as ‘Pantawid Pasada’, and the acquisition of the Hamilton-class cutter,” Valte said.
On July 5, 2011 Budget secretary Butch Abad released P2.87 billion which he said would be for the energy-related activities of the administration.
Abad justified the nature of the Malampaya Fund by saying that the fund balance of P79.48 billion as of May 2011 was not actual cash but an accounting of revenue inflows and expenditure items charged against the Fund since revenues were remitted to the government from the Malampaya Natural Gas Project since it started in 2002.
Abad explained that the annual revenue inflow in the form of net proceeds from the sale of petroleum from the Malampaya Natural Gas Project is accounted for as part of the yearly revenue program supporting the Budget proposal submitted to Congress.
Hence, the proceeds were effectively utilized every year to fund expenditures approved by Congress.
For 2011, some P26.2 billion of Malampaya proceeds are projected under the P138 billion non-tax revenue program of the government.
Abad said the Bureau of Treasury and the Department of Energy, however, maintain a Malampaya Special Account under the General Fund (Fund 151), to account for the revenue inflows due to its royalties from the Malampaya project and the specific expenditure items charged against Fund 151.
Abad explained that 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.
“We really have to be prudent whenever charging against the Malampaya Fund because of its impact on our fiscal health. Under the government of President Aquino, this fund will be used reasonably and rationally,” he said.
“So far under the Aquino administration, we have charged P2.87 billion from the fund for necessary energy-related expenditures,” he said. These expenditures are:
1. P2 billion for fuel requirements of the National Power Corporation-Small Power Utilities Group (NPC-SPUG), to avert a power shortage in off-grid areas;
2. P450 million for the Pantawid Pasada program, as direct support to jeepney and tricycle drivers affected by the recent spate of oil price hikes; and
3. P423 million for the purchase of the USS Hamilton cutter marine vessel to strengthen the security perimeter of the Malampaya Natural Gas Project.
Based on records of the DBM as of May 2011, an amount P105.95 billion has been collected from the Malampaya proceeds since 2002.
Amid charges over alleged misuse of Malampaya funds, two senators proposed to earmark the proceeds from the taxes, royalties and charges from the Malampaya Natural Gas Project for the implementation of the modernization program of the Armed Forces of the Philippines (AFP).
Senate President Pro Tempore Ralph Recto and Sen. Jinggoy Estrada filed their respective bills carrying almost the same proposal, although the former also filed a separate bill seeking to allocate a share of the said funds to peg the stranded debts of the Napocor.
The move of the two senators in seeking to tap the Malampaya funds to augment the implementation of the AFP modernization program came amid reports on the impending release of the Commission on Audit (CoA) special audit on the said funds.
Initial reports said that some P900 million of Malampaya funds went to the purported fake non-government organizations (NGOs) of Janet Lim Napoles, the alleged mastermind behind the pork barrel scam.
“Let’s wait first for the full report. We need to be very circumspect in naming names. We don’t want to have another Way-Kurat blunder,” said Sen. Nancy Binay in a text message to reporters when asked for her reaction on the forthcoming CoA report.
Estrada, in filing Senate bill No. 1420, noted that several years since the AFP modernization program was signed into law in 1995, it has yet to be fully implemented and the hindrance has been attributed to the lack of resources despite the establishment of the AFP Modernization Act Trust Fund.
“The necessary allocation for the program’s component such as the upgrading of weapon equipment, for example, could not be supported by the trust fund alone. Thus, the other sources would have to be tapped to augment the limited sources of the Trust Fund.
“Hence, this bill seeks to allocate and transfer to the AFP Modernization Trust Fund the following items representing the share of the National
Government from the taxes, royalties and charges collected from the Malampaya Natural Gas Project: 1. Excise taxes collected under Section 151 of the National Internal Revenue Code of 1997; 2. Other applicable mining taxes, royalties and other such taxes, fees or charges, including surcharges, interests and fines, authorized by existing laws, issuances or regulations,” he said.
Recto, in his Senate bill No. 466, said that the recent re-emergence of territorial threats particularly in the West Philippine Sea brought along the realization that capabilities to respond to external threats must also be given priority.
Recto noted that no less than Aquino himself has authoritzed in 2011 the release of P5.32 billion Malampaya funds to beef up the AFP’s territorial defense including the purchase of a USS Hamilton-class cutter for the Philippine Navy.
“Along this line, this bill seeks to include the Malampaya Natural Gas to Power Project as one ‘of the fund sources for the AFP Modernization Act Trust Fund. Under this proposed law, 30 percent of the annual net government share from the Malampaya proceeds will be earnarked for the implementation of the revised AFP modernization program.
“Furthermore, to make the disbursement of the Malampaya Fund transparent and free from discretion and abuse, the bill also mandates that its allocation to augment the AFP Modernization Act Trust Fund should be clearly provided for in the General Appropriations Act,” he said.
“Instead of using Malampaya Fund to finance non-energy related programs and projects of national government agencies, the said Fund would now directly benefit power consumers. Furthermore, to ensure transparency in the Fund’s utilization, the bill also mandates that the allocation of the said Fund to lower power costs should be clearly provided for in the General Appropriations Act,” said Recto. By Charlie V. Manalo, Angie M. Rosales and Paul Atienza

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