REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

RECEIVED “%\
nines 7 FEB 2015 "|
gree |

SIXTEENTH CONGRESS
Second Regular Session

House Bill No. 048 1

Introduced by MAGDALO Party List
_ Gary C, Alejano and Francisco Ashley L. Acedillo

EXPLANATORY NOTE

‘The Malampaya Fund was created to provide funds to finance for energy-related projects and for
other purposes that may be decided by the President. It consists of royalties collected from
operations of the Malampaya gas and oil fields in the waters off Palawan province.

However, such huge Presidential latitude purportedly became a blanket approval for the past
administration to abuse said power. The fund was allegedly drained to accommodate bogus
projects of the non-governmental organizations (NGOs) of Mrs. Janet Lim Napoles, in collusion
with government officials.

The present law, laced with noble intentions but little guidelines, was thereafter partially junked.
by the Supreme Court, as it struck as illegal the discretionary power of the President in utilizing
said Fund,

One of the basic and most urgent requirements for the peacefull and successful exploration and
development of energy resource in the country is safety and security in the area. This is because
energy sources are often found in isolated and sometimes contested areas. Hence, security
provided by the military is often an indispensible requirement for the successful pursuit of any
energy related project.

In fact, the Malampaya gas and oil field themselves, which are near disputed waters off Palawan,
continue to remain secure because of the efforts of the Armed Forces of the Philippines (AFP)
particularly, the Philippine Navy, which constantly patrol the area with ships coming from Naval
Forces West (NavForWest) operating at Oyster Bay, Palawan, the country’s first line of defense
in the disputed waters in West Philippine Sea.

Unfortunately, the existing law is silent with regards the provision of military support for energy-
related projects to guarantee the security of critical infrastructures in the Malampaya gas
platform and other energy related projects.

Prior to the High Court’s decision to clip the discretionary power of the President to disburse the
Fund, President Benigno Simeon Aquino III was able to prudently approve the release of
necessary funding to the AFP in order to expand and fortify the defences for natural gas
exploration in northern Palawan. With the issuance of the Supreme Court decision, however, the
President can no longer


It is now up to Congress to introduce the necessary guidelines in the law to authorize the use of
the Special Fund to finance the energy-related expenses of the AFP, particularly those
undertaken in part or in full for the security and protection of the Malampaya oil and gas fields
and other energy projects.

Hence, this measure seeks ensure the continued viability of the country’s energy program by
including guidelines for the utilization of the Special Fund to include the financing of energy-
related expenses of the AFP, such as but not limited to provisions for operational support,
capacity-building, acquisition of vessels, machinery and materiel, bases and support system
development and technology development, for the security and protection of the Malampaya oil
and gas fields and other energy projects.

In view of the foregoing, immediate passage of this measure is earnestly sought.

~; GARY (, ALEJANO- HO! RANCISCO ASHLEY L. ACEDILLO



REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City
SIXTEENTH CONGRESS
Second Regular Session

House Bill No.0 48.1

Introduced by MAGDALO Party List Representatives
=» Alejano and Francisco Ashley L. Acedillo

AN ACT
AMENDING SECTION 8 OF PRESIDENTIAL DECREE NO. 910 TO ALLOW THE
FINANCING OF ENERGY-RELATED EXPENSES OF THE ARMED FORCES OF THE
PHILIPPINES IN THE USE OF THI ECIAL FUND

Be it enacted by the Senate and House of Representatives of the Republic of the Philippines in
Congress assembled:

SECTION 1. Section 8 of Presidential Decree No. 910 is hereby amended to read as

follows:

Section 8. Appropriations. — The sum of Five Million Pesos out of any
available funds from the National Treasury is hereby appropriated and authorized
to be released for the organization of the Board and its initial operations.
Henceforth, funds sufficient to fully carry out the functions and objectives of the
Board shall be appropriated every fiscal year in the General Appropriations Act.
All fees, revenues and receipts of the Board from any and all sources including
receipts from service contracts and agreements such as application and processing
fees, signature bonus, discovery bonus, production bonus; all money collected
from concessionaires, representing unspent work obligations, fines and penalties
under the Petroleum Act of 1949; as well as the government share representing
royalties, rentals, production share on service contraets and similar payments on
the exploration, development and exploitation of energy resources, shall form part
of a Special Fund to be used to finance energy resource development and
exploitation programs and projects of the government, INCLUDING ENERGY-
RELATED EXPENSES OF THE ARMED FORCES OF THE

PHILIPPINES (AFP), SUCH AS BUT NOT LIMITED TO PROVISIONS


FOR OPERATIONAL SUPPORT, CAPABILITY-BUILDING,
ACQUISITION OF VESSELS, MACHINERY AND MATERIEL, BASES
AND SUPPORT SYSTEM DEVELOPMENT AND TECHNOLOGY
DEVELOPMENT, FOR THE SECURITY AND PROTECTION OF THE
MALAMPAYA OIL AND GAS FIELDS AND OTHER ENERGY
PROJECTS [and for such other purposes] as may be hereafter directed by the

President.
SEC. 2. Repealing Provision. — All laws, executive orders or administrative orders, rules
and regulations or parts thereof which are inconsistent with this Act are hereby amended,

repealed or modified accordingly.

SEC. 3. Effectivity. — This Act shall take effect fifteen (15) days following its publication

in the Official Gazette or in two (2) newspapers of general circulation.

Approved,