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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills
Quezon City

SEVENTEENTHCONGRESS
First Regular Session

House Bill No? 4604

~ Introduced by: Rep. Josephine Y. Rami:

EXPLANATORY NOTE

‘The Philippines is one of seventeen (17) “megadiverse countries” which
together host 70-80% of the world’s life forms and is believed to harbor more
diversity of life than any other country on earth on a per hectare basis. However,
the country’s biological diversity ("biodiversity") faces serious threats and concrete
actions are needed to implemented to ensure the its continued existence, as well as
those of the numerous services and benefits provided by healthy and well-
functioning ecosystems.

Article II, Section 16 of the Constitution declares that it is the duty of the
State to “protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature.” Biodiversity conservation results in
healthy and well-functioning ecosystems, which also contribute to climate change
mitigation as well as to disaster, risk reduction and mitigation.

‘The country’s framework and roadmap to conserving biodiversity is
detailed in the updated Philippine Biodiversity Strategy and Action Plan (PBSAP)
2015-2028 adopted in 2015. A product of multi-sectoral and multi-stakeholder
participatory consultations, the PBSAP identifies specific program interventions,
targets and indicators, including the estimated costs for the activities needed to
protect and conserve Philippine biodiversity.

The total cost of implementing the PBSAP 2015-2028 is estimated to range
from US$74 billion to USS8.6 billion while the projected appropriations of the
government agencies for the cost of activities is only US$ 1.5 billion, resulting in a
financial gap of approximately eighty per cent (80%).! Given this significant deficit,
all potential and feasible sources of financing must be tapped to help bridge this
finance gap and fully carry out the PBSAP for the benefit of all.

' Biodiversity Finance Initiative (“BIOFIN") project of the United Nations Development Programme (UNDP) ~


In this regard, government income from energy resource development
presents a viable source to support the implementation of the PBSAP. One in
particular is the now PhP183 billion? Special Fund created under Section 8 of
Presidential Decree No. 901° composed of the royalties, rentals, production share
on service contracts and similar payments to the government for the exploration,
development and exploitation of energy resources. The Special Fund is more
popularly known through one of its components, the “Malampaya fund,” which
consists of the government share from the Malampaya Deepwater Gas-to-Power
Project under Service Contract No. 38.

Biodiversity conservation is an inherent component of energy development
in view of the State policy to “to rationalize, integrate, and coordinate the various
programs of the Government towards self-sufficiency and enhanced productivity in power
and energy without sacrificing ecological concerns.”*

Even with proper environmental impact mitigation measures in place,
energy resource exploration and development activities can have a lasting adverse
effect on the surrounding ecosystems, landscapes and seascapes. Also, pollution
from the use of non-renewable energy resources directly affects wildlife and their
habitats. Greenhouse gas emissions from the use of non-renewable energy
resources likewise contribute to climate change, which, in turn, drives and
aggravates biodiversity loss.

Indeed, there is a nexus between energy resource development and
biodiversity. Government income derived from the exploration and use of energy
resources in the Philippines should contribute to bridging the biodiversity
conservation finance gap.

The use of Special Fund should also be used to address energy needs of
remote and isolated communities, especially in island provinces, who continue to
be without electricity or are underserved, in order to help spur local and regional
development. Where viable and appropriate, the use of renewable energy
resources should be prioritized.

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

2 According to Department of Budget ant Management (OBM) Sexfftary B¥njamin Diokno, the 2016 figure for

) "CREATING AN ENERGY DEVELOPMENT BOARD, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING
FUNDS, THEREFOR, AND FOR OTHER PURPOSES”

* Republic Act No, 7538 “Department of Energy Act of 1992” (9 December 1992), Section 2(6)


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills
Quezon City

SEVENTEENTHCONGRESS
First Regular Session

House Bill No.

~___ Introduced by: Rep. Josephine

amirez Sato

AN ACT AUTHORIZING THE USE OF THE SPECIAL FUND COMPOSED
OF THE GOVERNMENT SHARE FROM THE EXPLORATION,
DEVELOPMENT AND EXPLOITATION OF ENERGY RESOURCES FOR
RENEWABLE ENERGY DEVELOPMENT AND _ BIODIVERSITY
CONSERVATION ACTIVITIES, AMENDING FOR THE PURPOSE SECTION
8 OF PRESIDENTIAL DECREE NO. 910 ENTITLED “CREATING AN
ENERGY DEVELOPMENT BOARD, DEFINING ITS POWERS AND
FUNCTIONS, PROVIDING FUNDS, THEREFOR, AND FOR OTHER
PURPOSES” AND SPECIFYING THE USE OF THE SPECIAL FUND FOR
BIODIVERSITY CONSERVATION, AND FOR OTHER PURPOSES.”

Be it enacted by the Senate and House of Representatives 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, RENEWABLE ENERGY DEVELOPMENT FOR
REMOTE AND ISOLATED COMMUNITIES ESPECIALLY IN
ISLAND PROVINCES, AND FOR BIODIVERSITY
CONSERVATION ACTIVITIES [steh-other purpases-asmay-be
2 1"

Section 2. Implementing Rules and Regulations. - The Department of Energy, in
coordination with the Department of Environment and Natural Resources and
other concerned government agencies and members of the civil society, shall,
within six (6) months from the effectivity of this Act, promulgate the necessary
rules and regulations for the enforcement of the provisions of this Act.

Section 3. Repealing Clause. - All laws, decrees, executive orders, rules and
regulations or parts thereof inconsistent with or contrary to the provisions of
this Act are hereby repealed or modified accordingly.

Section 4. Separability Clause. - If any part or provision of this Act is held
unconstitutional or invalid, other parts or provisions hereof which are not
affected shall continue to remain in full force and effect.

Section 5. Effectivity Clause. - This Act shall take effect fifteen (15) days

following completion of its publication in at least two (2) newspapers of general
circulation.

Approved,