In February of 2004, civil society led by Bishop Pedro Dulay Arigo of Palawan, Cesar Sarino, the late Dr Gerry Ortega, the late Dr. Jose Antonio Socrates, Prof. Oscar Evangelista and Cesar R. Ventura and I filed suit before the Supreme Court questioning the legality of President Gloria Macapagal Arroyo’s use of the government proceeds from the Malampaya natural gas field. Petitioners, before going to the Supreme Court, had previously filed suit in the RTC of Palawan and the Court of Appeals, pursuant the hierarchy of Courts.
The petitioners’ complaint was simple. Under the 1987 Constitution, local governments were given a fair and equitable share in the revenues derived from natural resources found in their area. Under the Local Government Code, this share was defined as 40 percent of all gross government receipts from these resources. Palawan civil society then argued that a provisional sharing agreement entered into by Mrs. Arroyo and the then-local leadership of the province providing that Palawan shall be entitled to 20 percent net of all government revenues was unconstitutional.
This was on at least four grounds: First, the interim sharing agreement amended the legal provision on how much the entitlement should be: from 40 percent of gross to 20 percent net; Second, it amended the local government code in the manner by which it was to be shared by the barangay, municipality and province where the resources are found. Under the law, the province shall have 20 percent of such revenues, while the municipality and the barangay are to have the lion’s share of the revenues: 35 percent and 45 percent, respectively. The sharing agreement called for projects to be identified by the two representatives of the province, its governor, and the mayor of Palawan. Third, the Code provides the manner by which the money was to be spent: 80 percent of all sums should be applied to lower the cost of electricity in the province, while the remaining 20 percent should go to local government projects and for livelihood. The Interim sharing agreement made the fund additional pork barrel for the two representatives of the province and its other local officials. The fourth argument of the petitioners would prove to be perhaps the most important argument in promoting good governance. Petitioners argued that the manner by which Mrs. Arroyo entered into the agreement was unconstitutional because she spent the funds without congressional authorization.
In entering into the questioned sharing agreement, PGMA invoked the provision of a little known Marcos Presidential Decree 910, section 8 of which reads: “—Section 8. x x x 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 purposes as may be hereafter directed by the President.” Petitioners argued that this violates the rule that no money shall be paid out of the national treasury without appropriation by law.
PGMA, on the other hand, argued that because of the foregoing PD, all government revenues earned from Malampaya are in the nature of a special fund which can be disbursed at the pleasure of the President.
It was this argument that later led COA to conclude that at least P2.3 billion of the Malampaya funds were misused by local government officials of Palawan including its fugitive ex-governor Joel Reyes and the defeated Baham Mitra. Unfortunately, it was this interpretation that also led to the disbursement of the first tranche of P900 million Malampaya release that COA now says were plundered by Napoles and her cohorts. Ironically, the first tranche released to Napoles was authorized only two days after our oral argument in the Supreme Court on November 24, 2009. Worse, it is this interpretation that led to the release of a further P26.3 billion of Malampaya funds which early reports now say may have been released and malversed by Arroyo shortly before the 2010 elections.
It comes hence as no surprise that much of the scandal unearthed by the Napoles revelations involve the Malampaya funds. To begin with, the popular clamor that there “shall be no taxation without representation” was based on the idea that the people’s representatives should authorize all public spending and shall exercise oversight on the manner the sums are spent. Because the Malampaya funds were spent without congressional authorization, and hence without oversight, it was spent for any and all purpose that the President desired, And when you have a kleptomaniac for a president, that meant spending the money all for naught.
I cannot help but also blame the Court for this fiasco. The Malampaya petition has been pending in our courts since 2004. It reached the Supreme Court in 2009 after passing through the hierarchy of courts, Until today, it has not been resolved. Had the court acted on the petition seasonably, we may have prevented Napoles from squandering P900 million worth of public funds that could have gone to livelihood and lowering the cost of electricity in Palawan. We may even have prevented the further plunder of P26.3 billion worth of Malampaya revenues and applied the same not just for national defense, but also for education and heath purposes. As the saying goes, “justice delayed is justice denied.”
I rest my case.