The Commission on Audit will review other petroleum exploration service contracts, after looking into the books of Malampaya natural gas project, an official said Thursday.
The agency said it was looking at other contracts that were “similarly situated” to the Malampaya gas project, specifically those contractors who deducted their corporate income tax from the government’s share.
Flovitas Felipe, CoA-Department of Energy supervising auditor, told Senator Sherwin Gatchalian in a recent Senate hearing that “we were instructed to look into other similarly situated service contracts.”
Felipe said COA did not want the Malampaya consortium to feel it was being singled out by the agency.
The Malampaya service contract 38 consortium includes Shell Philippines Exploration B.V., Chevron Philippines and PNOC Exploration Corp.
“Our boss told us to look into the other service contracts,” Felipe said.
COA said that during the audit of the Malampaya gas project in northwest Palawan in 2004, the agency found that the corporate income tax of the Spex consortium was deducted from the government’ shares.
COA said the inclusion of the corporate income tax from the government’s share resulted in in the understatement of the government’s revenue by P2.63 billion.
The agency then issued a notice of charge to collect P53.1 billion from the consortium from Jan. 1, 2002 to Dec. 31, 2009.
Spex and the Energy Department filed an appeal of the decision, but COA still issued an additional notice of charge of P77.27 billion last year. COA was claiming a total of P151 billion as of end-June.
COA’s position is that taking the contractor’s income tax from the government share was tantamount to tax exemption.
Spex filed an arbitration case with the International Chamber of Commerce in Singapore and World Bank’s International Center for Settlement of Investment Dispute against the government.
Energy Secretary Alfonso Cusi said there was an urgency to resolve the COA issue.
“That’s why we are rushing it and we have referred to the SolGen. We have brought this matter to the economic cluster and we will be discussing this in the full Cabinet,” Cusi said.
Cusi also said the new administration had not yet adopted the position of the previous administration on Spex-COA issue and was still studying the matter.
Gatchalian, meanwhile, said he believed that the arbitration case filed by Spex was “too premature.”
“Of course, we cannot control the actions of the private sector but for me, it’s too early. We should exhaust everything first here domestically before we can move forward,” he said.
