Proceeds from Malampaya to start going down in next few years
MANILA, Philippines - The government is likely to get less proceeds from the Malampaya fund in the coming years, according to Cabinet Secretary Rene Almendras.
In an interview on ANC's Headstart, Almendras said the Malampaya funds will have to be reinvested to ensure the gas supply continues.
"Malampaya generates 30% of the electricity for Luzon and you want to make sure that supply of fuel continues. You need to reinvest, you need to dig more wells to make sure the gas supply continues. When those reinvestments happen, the returns to government goes down," he said.
The Malampaya fund is established from royalties and shares of the government in energy explorations with the end goal of funding energy development projects. Since 2001, the Malampaya fund has ballooned to P167 billlion.
The former Energy chief noted the amount of proceeds from Malampaya is not consistent.
"It is not always P30 billion a year. In the first six to seven years, the government didn't get anything... We were fortunate in 2011 and 2012, we did remit close to a billion dollars a year. But that's going to start going down because you need to reinvest," he said.
Meanwhile, Almendras said the Palace is not keen on opening up the use of the Malampaya funds for non-energy related projects.
Almendras said he prefers that funds from the exploration of energy resources be used solely for power projects, just like in other countries.
When he was still Energy Secretary, he noted there were many bills filed in Congress that sought to use the Malampaya funds for other purposes other than allowed by law.
"Sana naman wag. Look at all neighbors Malaysia and Indonesia, they too have Malampaya funds because they have exploration revenues. But they use their exploration revenues for energy things. They use it for more exploration, for providing energy to the underprivileged," he said.
But Almendras said the Palace supports proposals that will limit the President's discretion over the Malampaya funds.
"The key is to use this experience, all these mistakes...And to make sure we don't make the same mistake for the future."
Earlier, some lawmakers proposed amending Presidential Decree 910, which earmarks earnings from the exploitation of the country’s oil and gas resources for energy and energy-related projects, as well as any project approved by the President. - With ANC