P20-B Malampaya fund could be deployed to boost oil reserves

THE GOVERNMENT is considering the use of funds generated by the Malampaya offshore project to finance bulk purchases of petroleum products to mitigate the risk posed by the disruption of supply from the Persian Gulf, the Department of Budget and Management (DBM) said on Tuesday.

Budget Secretary Rolando U. Toledo said the P20-billion Malampaya fund is being considered to support bulk procurement of petroleum products.

“We are looking at tapping the Malampaya fund of P20 billion, and we will release that for bulk purchases of oil,” he told a Senate hearing on the government’s response to the Iran war.

Mr. Toledo said that he received a request from Energy Secretary Sharon S. Garin for the bulk purchase of petroleum products.

The DoE has signaled plans to purchase about 2 million barrels of diesel to bolster stockpiles after price shocks triggered by the escalating conflict in the Middle East.

The government is entitled to about 60% of the proceeds from the Malampaya offshore natural gas project. The government’s share is meant to be invested in domestic energy development.

At the hearing, Ms. Garin said the DoE is also looking into a revolving credit facility with the Land Bank of the Philippines worth P10 billion.

“We are also trying to access P15 billion in unused Philippine National Oil Co. funds to relieve the strain on the National Government budget,” Ms. Garin said.

Meanwhile, Mr. Toledo added that the government has about P210 billion to provide relief to those affected by the Iran war.

The DBM has allocated some of the funding for the Protective Services for Individuals and Families in Difficult Circumstances overseen by the Social Welfare department amounting to P63.8 billion; P4.2 billion for the Department of Migrant Workers, and P1.2 billion in assistance to Filipinos abroad. P2.5 billion will also be used for subsidies for transport.

Mr. Toledo said that the DBM is also looking to tap P21.28 billion from the Department of Labor and Employment and P51.64 billion from the Department of Health. — Adrian H. Halili