MANILA, Philippines?The people of Mindanao won't just sit by and let the government mess around with billions of pesos in calamity funds needed to address the power outages and the ill effects of drought on the island.

"The Mindanaoans are suffering and will never forgive anyone who will fool around with the calamity fund at a time of crisis like this,'' Secretary Jesus Dureza said in a phone interview.

The best guard against any fund misuse, he said, would be the private sector in Mindanao, who on Friday proposed to Malacañang an initial importation of 20-megawatt "high-speed'' generators.

"There are necessary control systems that can be done. We'd like to invite private sector participation,'' the head of the Mindanao Development Authority said. "The private sector will monitor this. That will be one good mechanism.''

Senators Benigno Aquino III and Manuel Villar Jr., fierce rivals for the presidency in the May 10 elections, have warned the administration against diverting the funds for electoral purposes.

Villar cautioned against disbursement of the funds to "politicians and favored candidates of the administration.''

President Gloria Macapagal-Arroyo has declared a state of calamity in Mindanao to deal with the crippling power outages caused by a month-long drought, allowing cities, towns and provinces to tap five percent of their calamity budgets.

Malacañang could not provide a ballpark figure, but the funds are expected to run into billions of pesos, raising concerns that these could end up in the pockets of local candidates.

Secretary Ricardo Saludo, presidential spokesperson, shrugged off the candidates' warning on fund diversion as part of a "campaign stunt to land on newspapers' front pages.''

"We can't take that away from them because this is the season of campaigning,'' he said over government-run dzRB.

Saludo, however, agreed that the private sector, civil society and the Church could serve as watchdogs in the disbursement and use of the calamity funds to discourage their misuse.

"Of course, the business sector and the civil society in Mindanao will keep tabs to ensure that the funds are spent to plug power shortages and provide for the needs of the farmers,'' he said. "If they do that, there won't be any widespread irregularity or abuse.''

He said the Procurement Transparency Group, created to address corruption in government and composed of government agencies and NGOs, monitors the implementation of national projects. He said it could play the same role in the local government.

"We have civil society and private sector observers,'' he said.

At last Friday's high-level meeting with Cabinet officials in Malacañang, some members of the Mindanao Electric Power Alliance proposed to import 20-megawatt generators to help plug the power shortages, according to Dureza.

In exchange, the government, through the Development Bank of the Philippines and Landbank of the Philippines, offered loans to finance this, he added.

"It was a good meeting. The private sector will package a quick project, while the government will provide support and financing guarantees,'' Dureza said by phone.

Also present at the meeting, ordered by Arroyo, were Executive Secretary Leandro Mendoza, Energy Secretary Angelo Reyes, Defense Secretary Norberto Gonzales, Finance Secretary Gary Teves, Press Secretary Crispulo Icban Jr., and Undersecretary Elena Bautista of the Presidental Management Staff, according to Dureza.

The proponents are expected to submit their proposals to Mendoza on Monday, which in turn will be studied by the DBP and Landbank, he said.

Dureza admitted that this was just a "stop-gap measure,'' but if it pushes through, this could encourage other power producers on the island to follow suit.

He conceded that this intervention would lead to higher power rates in Mindanao. He said that the Energy Regulatory Commission would approve the rates.

In effect, the proponents will be selling power to the Mindanao Grid at rates approved by ERC, Dureza said.

"If the Mindanaoans feel that the rates are too high, they can oppose this in the ERC. The ERC will act accordingly. It's a choice of having no or little power, and higher rates,'' he said.

But quoting experts, Dureza said that even if the rains come in July, this may not be sufficient to bring the water in hydropower systems to normal levels, hence, the need for long-term solutions.

"It may take until December before the level at the Pulangui and Agus hydrosystem becomes normal. So Mindanao will still be short of power. Long-term solutions will have to be pursued now,'' he said.