Friday, September 19, 2014

Tap unspent P180-B Malampaya, energy royalties for emergency power needs

MANILA-Unspent royalty payments from Malampaya and other energy projects are expected to reach P180 billion by the end of year making it an abundant source of funds for projects government may undertake once Congress grants President Aquino emergency powers to tackle the looming energy crunch.

“If you read the 2015 budget documents, it says there that there is a balance of P148.8 billion as of December 2013 in government shares from Malampaya and other energy development projects,” Senate President Pro-Tempore Ralph Recto said.

“If you add the remittances for 2014, which is projected at P31.6 billion, and deduct about P757 million in withdrawals this year, then the end-year balance is about P179.7 billion,” the senator said.

“Those are not my figures. They’re the ones stated in the Budget of Expenditures and Sources of Financing,” Recto said, referring to a document more known in lawmaking circles by its acronym “BESF” which accompanies the proposed national budget.

With this hoard, Recto said ”theoretically, the government can fully subsidize the estimated P6 billion cost of contracting 600 megawatts of electricity next year in order to bridge supply gaps which are expected to worsen during the summer months when electricity use spikes up.”

“Kung tutuusin pwede ngang sagutin na ng gobyerno ‘yan. Pwede ngang libre, from the point of view of financial capacity,” Recto said.

“P6 billion is what we spend in 30 days for the CCT (Conditional Cash Transfer). That’s equivalent to the government’s payroll and pension expenses in three days. So ‘yung anim na bilyon, 72-hours lang ‘yan na pangsweldo at pang-pension ng ating gobyerno ngayon,” Recto said.   

The senator was referring to the P761 billion earmarked for personal cost or PS of the bureaucracy for 2015.  CCT’s proposed budget on the other hand is P64.7 billion but other financial aid projects of the DSWD has pushed the latter’s budget to P109 billion for next year.

After Energy officials warned of a 400-megawatt to 1,000-megawatt shortfall in the Luzon power supply in the first half of 2015, Malacanang is scrambling to secure emergency powers from Congress so it can contract private power providers to supply 600 megawatts.

The contracted power will be divided equally for reserves which can be kicked in during peak demands and to bolster baseload capacity.

Under current laws, government is barred from building power plants but the President may ask Congress for authority to contract additional generating capacity if there is an imminent electricity supply shortage.

Now that the President has asked for emergency powers, Recto said the debate will not center on the wordings of the joint resolution Congress may issue, but “on the costing, the pesos required.”

So that the authority “will be backed by legal tender,” Recto proposed that the amount needed be included in the Special Provision of the Department of Energy (DOE) budget in the General Appropriations Bill.

He explained that aside from the appropriations for DOE, which is P3.3 billion for 2015, the agency is given authority to use proceeds from energy development projects, like the Malampaya, in financing energy-related projects.

For 2015, that add-on is about P974 million, Recto said. “What we can perhaps do is raise this ceiling to accommodate the P6 billion, if that is what’s needed.”

“Mas maganda ang ganito kasi transparent, nasa budget, merong limit sa gagastusin,” he said.

Presidential Decree 910 pools “all government shares representing royalties, rentals, production share on service contracts and similar payments on the exploration, development and exploitation of energy resources” in an off-budget special fund.

For this year, Malampaya will contribute P28.3 billion; coal production, P1.6 billion; geothermal projects, P572 million; oil, P1.1 billion; for a total of P31.6 billion. 

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