HOUSE OF REPRESENTATI

REPUBLIC OF THE a.
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 8713

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

EXPLANATORY NOTE

Presidential Decree No. 910 mandated the creation of the Malampaya Fund for the purpose of
financing “energy resource development and exploitation programs and projects of the
government,” The Malampaya Project is “a joint undertaking of the Philippine national
government and the private sector spearheaded by the Department of Energy (DOE) and
developed and operated by Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture
partners Chevron Malampaya LLC and the PNOC Exploration Corporation.’ The Malampaya
Fund is derived from the proceeds of the Malampaya natural gas project off the coast of Palawan
province that was started in 2001 with a current balance of P137.288 Billion, as recently
confirmed by the Bureau of Treasury.

Contrary however to the spirit of the law, during the previous administration, said Fund was
allegediy siphoned off to finance anomalous transactions such as those involving dubious
Foundations linked to Mrs. Janet Lim-Napoles, which resulted to a loss of 900 Million pesos due
to ghost deliveries of goods for projects under the government, Said circumstance invited outrage
from the citizenry and prompted the High Court to clip the discretionary powers of the President
to touch the huge fund although it affirmed the constitutionality of utilizing the same insofar as
energy resource development and exploitation programs and projects of the government are
concerned.

Aforesaid ruling, however, puts the President into a quandary on when he is allowed to tap the
Fund. Case in point is the President's uncertainty whether he can use said Fund as subsidy for the
direct benefit of electric end-users to minimize the financial brunt of the impending power hike
of the largest power distributor in the country.

~ Itis, thus, incumbent upon Congress to promote public interest by once and for all amending the
more than three-decade old law. It is against this backdrop that this measure seeks to revise said
law by expressly authorizing the use of the Special Funds which include the Malampaya Fund to
finance the maintenance, rehabilitation, and replacement of energy infrastructure in preparation
for and in response to natural and man-made calamities as well as to finance direct subsidy for
energy consumption by end users in case of market failure.

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

CISCO ASHLEY L. ACEDILLO LY C, AEEJANO

41 Please see: Ms, Sara _Soliven de Guzman, The Malampaya Story. Accessed from
http://www philstar.com /opinion/2013/10/28/1250232/malampaya-story on 12/16/2013.


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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No. 8713

Introduced byMAGDALO Party List Represent:
Francisco Ashley L, Acedillo and Gary C. Alejano

s

AN ACT
AUTHORIZING THE USE OF THE SPECIAL FUND TO FINANCE THE
MAINTENANCE, REHABILITATION, AND REPLACEMENT OF ENERGY
INFRASTRUCTURE IN PREPARATION FOR AND IN RESPONSE TO NATURAL
AND MAN-MADE CALAMITIES AS WELL AS TO FINANCE DIRECT SUBSIDY FOR
ENERGY CONSUMPTION BY END USERS IN CASE OF MARKET FAILURE
THEREBY AMENDING SECTION 8 OF PRESIDENTIAL DECREE NO. 910

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 contracts 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, [and for such other


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purposes as may be hereafter directed by the President], AS WELL AS TO
FINANCE THE MAINTENANCE, REHABILITATION, AND
REPLACEMENT OF ENERGY INFRASTRUCTURE IN PREPARATION
FOR AND RESPONSE TO NATURAL AND MAN-MADE CALAMITIES,
AND TO FINANCE DIRECT SUBSIDY FOR ENERGY CONSUMPTION

BY END USERS IN CASE OF MARKET FAILURE.
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,