REPUBLIC OF THE PHILIPPINES
FIRST REGULAR SESSION )

SIXTEENTH CONGRESS )
)

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez
"_ Representative Maximo B. Rodriguez, Jr.

House Bill No_ 4297

EXPLANATORY NOTE

Presidential Decree No, 910 mandated the creation of a Special Fund to be used to
finance energy resource development and exploitation programs and projects of the
government and for such other purposes as may be hereafter directed by the President.

This Special Fund will be sourced from the government share representing royalties,
rentals, production share on service contracts and similar payments on the exploration,
development and exploitation of energy resources.

With this, the Malampaya Fund which represents royalties from the oil and gas field
operations in the waters off Palawan was born.

‘According to an article in the Philippine Star written by Sara Soliven De Guzman, the
Malampaya Deep Water Gas-to-Power project is one of the largest and most significant
industrial endeavors in Philippine history. A joint undertaking of the Philippine national
government and the private sector, the project is spearheaded by the Department of Energy
(DOE) developed and operated by Shell Philippines Exploration B.V. (SPEX) on behalf of
joint venture partners Chevron Malampaya LLC and the PNOC Exploration Corporation.

PD 910 however, authorizes the use of the fund for other projects approved by the
President without seeking legislative sanction. Critics say that this undermined the
constitutional mandate to the legislature of its power of the purse

This discretion on the part of the President could lead to abuse which was what
allegedly happened during the previous administration. The Malampaya Fund was allegedly
siphoned off to finance anomalous transactions.

As such, it would be more prudent to include the Malampaya Fund in the general
fund to be appropriated by Congress thru the Annual General Appropriations Act. This would
also make the fund subject to the checks and balances provided for by the Constitution

In view of the foregoing consideration, immediate approval of this bill is highly
recommended.



SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES

“Introduced by Representative Rufus B, Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 4297

AN ACT
AMENDING PRESIDENTIAL DECREE NUMBER 910 CREATING AN ENERGY
DEVELOPMENT BOARD, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING
FUNDS, THEREFOR, AND FOR OTHER PURPOSES BY INCLUDING THE SPECIAL
FUND CREATED TO THE GENERAL FUND OF THE NATIONAL GOVERNMENT

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

SECTION 4. Section 8 of Presidential Decree 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 contracts and similar payments on the
exploration, development and exploitation of energy resources,
shall form part of [a Special Fund) THE GENERAL FUND OF
THE PHILIPPINES to be used to finance energy resource
development and exploitation programs and projects of the
government [and for such other purposes as may be hereafter
directed by the President] AS APPROPRIATED BY CONGRESS
IN THE ANNUAL GENERAL APPROPRIATIONS ACT

SECTION 2. Repealing Clause — All laws, decrees, orders, rules and regulations, and other
issuances or parts thereof, that are contrary to or inconsistent with this Act are hereby
repealed or amended accordingly.

SECTION 3. Effectivity — This Act shall take effect fifteen (16) days following its publication
in at least two (2) national newspapers of general circulation.

Approved,