The Makati Business Club (MBC) does not speak for the entire business sector in the country, House Assistant Majority Leader Eduardo Gullas said Wednesday, as he rebuffed the group’s call for the government—through the state-owned Philippine National Oil Co. (PNOC)—to take control of the operations of the aging offshore Malampaya gas field.
“There are far more representative chambers of commerce and industry in the country that want the government to stay out of any business and avoid competing with private enterprises,” Gullas, who represents Cebu province’s first district in Congress, said.
“In fact, we would not be surprised if business groups in the provinces, such as those in Cebu and Davao, tend to perceive the MBC as an elitist club from ‘imperial’ Manila,” Gullas said, adding that “the whole point of the government’s petroleum service contracting scheme is precisely to let private corporations assume the risk of spending capital to discover and develop our indigenous gas and oil resources.”
“If they drill an offshore well that won’t flow gas or oil in commercial quantities, then the government does not have to worry about reimbursing them,” Gullas said.
Manuel Pangilinan’s PXP Energy Corp., Enrique Razon Jr.’s Monte Oro Resources & Energy Inc., and Jaime Augusto Zobel de Ayala’s ACE Enexor Inc., among others, are already engaged in petroleum service contracting, according to Gullas.
“We must also stress that any government acquisition and operation of a new energy asset would be highly regressive, considering that the state has been disposing of them for decades,” Gullas said.
Gullas recalled that in 2007, under pressure to bridge the budget deficit, the government sold its 60 percent stake in PNOC Energy Development Corp. (PNOC EDC) for P58.5 billion to a partnership led by Lopez-owned First Gen. Corp.
“When the government sold PNOC EDC, nobody protested and said the government should keep the asset because it is the country’s largest and the world’s second-largest geothermal energy producer,” Gullas said.
PNOC EDC was a Philippine Stock Exchange-listed entity with 40 percent of its shares held by the public when it was sold by the government.
Gullas also cited the case of the National Power Corp. (Napocor), whose generating and transmission assets were sold off and are now owned and operated by private firms.
“We got rid of PNOC’s and Napocor’s holdings not only because the government needed the money, but also because the government did not have the cash to modernize, improve and make these assets economically viable,” Gullas said.
“The truth is, the government is a debt-ridden lumbering giant that cannot compete with highly capable private entities in running and growing energy assets,” Gullas said.
Due to aggressive spending to suppress the COVID-19 pandemic, Gullas said the government’s debt has ballooned by almost P2 trillion – from P10.027 trillion in October 2020 to P11.971 trillion as of October this year