SOURCE OF GAS WEALTH The Malampaya gas rig is found 80 kilometers off the shore of northwest Palawan. INQUIRER PHOTO

(INQUIRER) By Gil C. Cabacungan - The release of P900 million from the Malampaya Fund to the Department of Agrarian Reform (DAR) had already been “fixed” even before officials asked for quick response money from Malacañang on the pretext that farmers needed livelihood kits to recover from the damage wrought by Storms “Ondoy” and “Pepeng” in 2009, the Inquirer has learned.

These allegedly overpriced livelihood kits to farmers were just a ruse deployed by fake nongovernment organizations (NGOs) owned by detained businesswoman Janet Lim-Napoles to access the Malampaya Fund sought by then Agrarian Reform Secretary Nasser Pangandaman from then President Gloria Macapagal-Arroyo.|

A letter issued by the then “little president,” Executive Secretary Eduardo Ermita, provided state agencies like the DAR the green light to dip into the Malampaya Fund which eventually led to a total of P14 billion released by the Arroyo administration just a few months before the 2010 elections.

“This pertains to the Oct. 13, 2009, letter of Executive Secretary Eduardo Ermita relative to the approval of the President (Arroyo) to use Special Account in the General Fund (Fund 151) of the Department of Energy in such amounts as may be necessary for the relief operations, rehabilitation, reconstruction, and other works and services to areas affected by natural calamities,” then Budget Secretary Rolando Andaya said in a memo to the Office of the Treasurer approving the P900-million allocation to the DAR.

Andaya previously told the Inquirer that Arroyo approved the use of the Malampaya Fund, the access of which was restricted by law for energy-related projects, during a series of Cabinet-level meetings.

Ermita’s letter came nine days before then Agrarian Reform Undersecretary Narciso Nieto formally requested for a P900-million budget “to provide directly to our farmer-beneficiaries the necessary inputs to help them recover from their losses ” in a letter to Andaya dated Oct. 22, 2009.

“Based on our past experiences, we realized that providing the farm communities the means to do this would be the best way to help them accelerate recovery from these two calamities,” said Nieto, who placed the damage to communities of agrarian reform benefiaries from Ondoy and Pepeng at P10 billion.

A DAR officer, who refused to be named for fear of reprisal, said that Nieto had to pinch-hit for Pangandaman who was then in the United States, because the department wanted the money released before the end of the year.

The special allotment release order (Saro) for the P900-million fund was issued by Andaya on Nov. 19, 2009, with the notice of cash allocation (NCA) released to Land Bank of the Philippines, Quezon Circle branch, a little over a month later on Dec. 21.

Cash before Christmas

Based on the liquidation report obtained by the Inquirer, the checks for roughly 90 percent of the DAR funds were dated between Dec. 22 and 23 which allowed Napoles’ staff to withdraw the money before Christmas 2009.

Whistle-blowers Benhur Luy and Merlina Suñas said these withdrawals were among their single biggest haul in their years of working under Napoles.

Curiously, the checks for the balance of the remaining 10 percent were dated Nov. 25 and were taken from the DAR’s general funds.

The DAR official said the fund releases comprised one of the biggest lump sums received by the agency and were rare since it did not handle quick response funds for typhoons.

The official said that the DAR knew that these funds were intended for the 12 Napoles NGOs even before they received the Saro and the NCA because their officers had been religiously following up the release with the agency’s staff.

Suñas claimed in recent interviews that she took the names of the local government beneficiaries from the list of towns hard hit by Ondoy and Pepeng.

The livelihood packages were labeled farm initiative production kits or agricultural production equipment that were valued in the memorandum of agreement at either P38,118 or P42,358 each.

Luy and Suñas claimed that none of the equipment reached the listed beneficiaries.

Based on the liquidation report, the NGOs and amounts received were Abundant Harvest for People’s Foundation Inc. led by Vanessa Eman (P75 million); Bukirin Tanglaw Foundation Inc. led by Gertrudes Kilapkilap (P75 million); Dalangpan Sang Amon Utod Kag Kasimanwa Foundation led by Jesus Castillo (P75 million); Ginintuang Alay sa Magsasaka Foundation Inc. led by John B. Lim (P77.5 million); Gintong Pangkabuhayan Foundation Inc. led by Eulogio D. Rodriguez (P82.5 million); Karangyaan para sa Magbubukid Foundation Inc. led by Simplicio Gumafelix (P82.5 million); Kasaganahan para sa Magsasaka Foundation Inc. led by Genevieve Uy (P75 million); Kaupdanana para sa Magsasaka Foundation Inc. led by John Raymund de Asis (P75 million); Masaganang Buhay Foundation Inc. led by Ronald Lim (P55 million); Saganang Buhay sa Atin Foundation Inc. led by Lilian Espanol (P80 million); and Tanglaw para sa Magsasaka Foundation Inc. led by Nova Kay B. Dulay (P62.5 million).

COA inquiry

The Commission on Audit (COA) is investigating disbursements amounting to P23.6 billion from the Malampaya Fund by the Arroyo administration, 60 percent of which were released during a spending binge before the May 2010 presidential election.

Andaya earlier told the Inquirer that as the budget secretary, he and his undersecretary, Mario Relampagos, signed more than 150 Saros covering P14 billion between Oct. 21 and Dec. 29, 2009, ostensibly for the victims of the back-to-back storms that killed more than 1,000 people.

Upon orders of Arroyo

Now a Camarines Sur representative, Andaya said that funds were released upon the orders of Arroyo during a series of Cabinet meetings, but he maintained all of the disbursements were above board.

The COA review of the Malampaya Fund is separate from the special audit on the Priority Development Assistance Fund (PDAF), or pork barrel, results of which have led to the filing of plunder and malversation charges against three senators, five congressmen and 30 other officials of state agencies and NGOs.


SC asked to resolve 4-year old malampaya 'fund misuse' case GMA News OnlineGMA News Online

The Senate Blue Ribbon Committee, in its third hearing on the alleged misuse of Malampaya funds on Thursday, focused on the death of Palawan journalist and environmentalist Gerry Ortega, which many believe is linked to supposed project anomalies.

The Supreme Court on Thursday was asked to resolve a four-year-old petition on the Malampaya gas fund in light of recent allegations that the money was misused through bogus non-government organizations headed by fugitive Janet Lim-Napoles.

"With due respect to the Supreme Court, the Petitioners, the people of Palawan, and the people of the Republic of the Philippines have waited long enough for this Honorable Court to write finish to this plunder of public coffers," the petitioners, led by Bishop Pedro Arigo Dulay, noted in a motion to resolve the issue.

The "systematic plunder" of the Malampaya funds has gone unabated since the petition was filed four years ago, as allegedly evidenced by the supposed pork barrel scam involving Napoles and several fake NGOs, the petitioners said.

Then-President Gloria Macapagal-Arroyo, through Executive Order 683, authorized the use of fees, revenues and receipts from Malampaya gas field's Service Contract No. 38 for the implementation of development projects for the people of Palawan.

Malampaya is a natural gas field located in the West Philippine Sea, off northwest Palawan. The project is spearheaded by the Energy Department and operated by Shell Philippines Exploration B.V. (SPEX) with joint venture partners Chevron Malampaya LLC and PNOC Exploration Corporation.

Test drills conducted by SPEX in 1989 confirmed the presence of about 2.7 trillion cubic feet of natural gas reserves and 85 million barrels of condensate — liquid hydrocarbon mainly composed of propane, butane, pentane and heavier hydrocarbon fractions — located some 3,000 meters below sea level. Natural gas from Malampaya now feeds three power plants with a combined capacity of 2,700 megawatts equivalent to 40 percent of Luzon’s power generation requirements.

The petitioners cited last week's COA report that revealed, among others, the use of "P23.6 billion from the Malampaya Fund by the Arroyo administration, 60 percent of which were released during a spending binge before the May 2010 presidential elections."

In February this year, the Malampaya consortium paid the government $1.1 billion in royalties from the deep water gas-to-power project. The Malampaya consortium also paid the government $1.134 billion in January 2012, according to the Department of Energy. 40 per cent share for Palawan?

The petitioners' original petition filed in February 2009 had been consolidated with a separate petition filed by the Departments of Energy, Finance, and Budget and Management. Named respondents in the consolidated petitions were former Palawan Gov. and now fugitive Joel Reyes, and Arroyo's Executive Secretary Eduardo Ermita. On November 24, 2009, the Supreme Court heard oral arguments on the case, but has yet to resolve the petition until now.

Among the issues tackled was whether Palawan should be entitled to a 40-percent share in the use and development of the Camago-Malampaya natural gas reservoir, which is approximately 80 kilometers from the nearest Palawan coastline, and somewhere between the mainland and the Municipality of Kalayaan.

The petitioners also wanted the high court to rule on whether Palawan's jurisdiction over marine waters – for purposes of sharing in the national wealth – is confined within the 15-kilometer zone of its municipal waters. P900 million to Napoles "Had the Court decided the case immediately after oral arguments almost four years ago, we would not have just prevented Napoles from squandering 900 million of government money," said the petitioners in their latest motion to resolve the case.

A report in the Philippine Daily Inquirer said at least P900 million from royalties in the operation of the Malampaya gas project has gone into a dummy non-government organization (NGO).

Apart from the Malampaya funds, P10 billion from pork barrel funds – or Priority Development Assistance Funds (PDAF) – of lawmakers had been diverted supposedly to Napoles's non-existent foundations involving ghost projects.

Napoles and the lawmakers were said to have split the money. The petitioners lamented how one of the case's original petitioners, Palawan-based broadcaster Dr. Gerardo Ortega, had been killed without seeing the case resolved by the high court.

Ortega was slain on January 24, 2011 in Puerto Princesa allegedly because of the exposes he made as a radio broadcaster, including massive corruption involved in the government’s handling of the Malampaya fund. Ex-Governor Reyes has been tagged as the mastermind in the crime, but he has denied the charge and accused his political enemies of persecuting him.

Meanwhile, Napoles and her brother, Reynald Lim, are now the objects of a nationwide manhunt operation both by the National Bureau of Investigation and the Philippine National Police over a case of serious illegal detention.

They are wanted for the alleged kidnapping of "pork barrel scam" whistleblower Benhur Luy, who claimed to be a former employee of Napoles's JLN Corp.— LBG/VS, GMA News


Bishop bares anomalies in Malampaya funds ARTICLE | OCTOBER 24, 2012 - 12:59AM | BY CBCPNEWS

MANILA, Oct. 23, 2012— A Catholic bishop wants the government to hold accountable the people behind the alleged misuse of the proceeds from Malampaya Gas Project off Palawan.

Puerto Princesa Bishop Pedro Arigo claimed that certain “powerful” politicians were behind the “anomaly”, and therefore need to be punished for “causing pain to the society.”

“The money just went to corruption practically,” Arigo said in a press conference in Manila on Tuesday.

The bishop called on the Office of the Ombudsman to file appropriate charges over the questionable use of P2.3 billion based on the report of the Commission on Audit (COA).

Arigo also asked the Senate Blue Ribbon Committee to conduct an investigation on how the hefty funds released to the provincial government of Palawan are being utilized.

He said former President Gloria Arroyo, then Palawan Gov. Joel Reyes, former Palawan Rep. Abaraham Kahlil Mitra, who is now governor, are some personalities that should be investigated.

He said the alleged irregularity also involved around 10 ranking officials of the Department of Public Works and Highways (DPWH) in Palawan.

According to him, Arroyo and other Palawan provincial officials that “conspired” to constitute the Interim Sharing Agreement in 2009 must be held accountable.

“Definitely they should be held accountable because the interim sharing agreement between the provincial and national governments was created to use the money of Malampaya for their own,” he said.

Based on the two COA reports, malpractices proliferated in the bidding of projects involving P1.782 billion and P520 million, which were sourced from the Malampaya funds.

He said that while the COA report affirms their long-standing call of irregularities in the use of the funds, they are not yet satisfied with the recommendation of imposing “simple administrative charges”.

“Even those accused in the misuse of P355 million funds of the PCSO (Philippine Charity Sweepstakes Office) were charged with plunder,” he said. “This Malampaya really has basis to be a plunder case.”

Arigo said he believes that the supposed misuse of the Malampaya funds brought huge disappointment to the Palawanenos since it initially held a lot of promise.

Under the agreement, Palawan and the national government will split portions of the money from the Philippines’ largest natural gas development project.

“Even Arroyo herself said at that time that Palawan will soon be the richest province of the Philippines. Others said Palawan will be like Singapore and this is what happened… a big letdown,” said Arigo.

The church official also believed that the anomaly has something to do with the killing of environmentalist and hard-hitting broadcast journalist Gerry Ortega in 2011.

“It was being done secretly. It was only because of the exposes of Dr. Gerry Ortega that it was made known to the public,” he said. (RL/CBCPNews)

Chief News Editor: Sol Jose Vanzi

All rights reserved