Solons seek accounting of Malampaya fund

The hunt is on.

Senators on Thursday demanded a full accounting of some P100 billion in allegedly missing revenue that the government earned from the Malampaya gas project in Palawan province.

“We should do something about it. It’s mind-boggling that there’s P100 billion missing,” said Sen. Ralph Recto, chair of the ways and means committee.

At the hearing of the congressional oversight committee on the comprehensive tax reform program, National Treasurer Roberto Tan on Wednesday said that Malampaya revenues totaled P121.97 billion from 2002 to August this year.

Of the amount, P21.645 billion had been spent on items such as the conditional cash-transfer program and the purchase of the Hamilton-class warship from the United States by the Philippine Navy, Tan said.

Commingled

Recto asked where the remaining amount was being kept and was told that it was “commingled” in the general funds of the national treasury.

“When do you say it’s commingled? It means it has been spent for other purposes?” the senator asked.

“It can’t be commingled. That’s why it’s a special purpose account. (It’s) for a special purpose. It should not have been used for any purpose other than that from which it was created like energy exploration,” he said.

Special account

Recto on Thursday said Malampaya revenues should be placed in a special account so these would not be mixed and inadvertently lost in the overall fund of the national government.

Senate President Juan Ponce Enrile agreed, noting that the amount should be “treated as a special fund under a special account in the hands of the national treasury earmarked for a certain purpose of government.”

Enrile said he had raised similar concerns with the previous Arroyo administration, but did not get a clear answer on how the Malampaya funds were being spent.

“Where is the money? Where is it deposited? How much income is it earning? Nobody can answer,” he said.

Foregone revenue

Enrile noted that the government was also losing huge foregone revenues owing to the tax exemption granted by the previous administration to the Malampaya project operators—Shell Philippines Exploration BV and Chevron Texaco.

“What I find rather strange is that the law under which that contract was concluded prohibits the government from exempting the operator from income taxation,” he said at the Senate hearing of the budget of the Department of Finance and its attached agencies.

Enrile said the government did exempt the operator from income taxation. “That’s bad enough, but still, the government went a step further and exempted the mother company of the operator from income taxation on the remittances of dividends to it,” he added.

As a result, he said the government was losing what should have been tax revenues collected from the Malampaya project since it began nine years ago.

“That tax is absorbed by the national government,” Enrile said.