Malampaya pays taxes on time

MANILA, Philippines – The Department of Energy (DOE) has maintained that the consortium operating Malampaya deep water gas-to-power project has not been remiss in paying government taxes.

After much review, Energy Secretary Alfonso Cusi reiterated the previous DOE administration’s stand on the the tax issue besieging the Malampaya consortium as ruled by the Commission on Audit (COA).

“First time it was raised I said I need to study the full background of the issue. Then discussed it to economic cluster and the Cabinet. We concurred with the DOE stand,” he said.

The previous leadership of DOE said income tax was deductible from the government’s 60 percent share of Malampaya’s earnings.

COA earlier wrote to the Energy chief asking the new administration’s position on the P53.14-billion tax dispute of the Malampaya consortium, composed of Shell Philippines Exploration B.V. (SPEX), the Philippine National Oil Co. Exploration Corp. (PNOC-EC) and Chevron Malampaya LLC.

In turn, Cusi said he will study the issue as the agency gathers all necessary and related information.

COA found the tax deficiency in 2009 and it was upheld in an April 6, 2015 decision after the Malampaya consortium appealed the ruling.

Because of this, SPEX then decided to sue the Philippine government by filing an arbitration case with the Singapore International Arbitration Center in late 2015 and another with the International Center for the Settlement of Investment Dispute in July 2016.

Since then, Malampaya’s tax dispute has ballooned to around P151 billion, according to COA.