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Ifugao in territorial clash with Isabela over dam tax
By Ramon Dacawi

IFUGAO province is locked in a legal battle with neighboring Isabela on which has territorial jurisdiction over the Magat Dam that generates millions of pesos in taxes for the local government unit actually hosting the giant electric power plant.

Ifugao Gov. Teddy Baguilat said he is contesting a proclamation issued by Malacanang last August that the National Power Corp. reservation encompassing the dam is in Isabela.

Baguilat said Isabela worked out the release of the proclamation to corner tax shares from the operation of the 360-megawatt facility after its award to SN Aboitiz Power, Inc. The firm, a partnership of Statkraft Norway and Aboitiz Equity Ventures, won the auction for the power plant with a $530 million bid in 2006.

He said the case is not isolated as other Cordillera Provinces composing the watershed cradle of Northern Luzon are faced with similar issues. He noted it was high-time for Cordillera provinces to discuss how they can protect their rights over natural resources and wealth within their domains.
When (the dam) was built, it was on Ifugao soil and we have titles to show to prove this,” he said, adding that the NPC reservation and facility is actually in Alfonso Lista, Ifugao.

Ifugao has filed a petition for a temporary restraining order to prevent Isabela from collecting the franchise and other taxes from the operation of Magat.

Baguilat noted that some NPC and other authorities admitted that the dam lies on Ifugao soil and not in Ramon, Isabela.

Release of the taxes due has been withheld pending the resolution of the case, Baguilat said. Earlier, the Bureau of Internal Revenue in Ifugao collected P170.8 million in taxes from the dam’s operation.

Smarting from Isabela’s jurisdictional claim, Ifugao “mumbaki” (native priests) led tribal and government leaders and villagers to at the Magat Dam in March last year where rituals were performed to seek intervention of the gods and their ancestors in their claim over the land where the facility was built.

Saying that Ifugao is not alone in its fight for rights over its resources, Baguilat stressed that the dam issue and others common with the other provinces of the Cordillera should now be the subject of discussions among leaders and representatives of the highland region.

Last November, Benguet Gov. Nestor Fongwan went to court in an effort to collect from NPC P198 million in taxes due the province for the operation of two dams – P116 million in national wealth tax for the San Roque Dam in Pangasinan and P56 million in franchise taxes and P26 million in real estate taxes for the Binga Dam in Benguet.

Benguet is also host to the moribund Ambuclao Dam which, together with the Binga, was built in the 1950s, and several mini-hydros also being operated by Aboitiz. Benguet, together with portions of Mt. Province and Baguio City, serves as watershed of the Agno River flowing into the San Roque in San Nicolas and San Manuel, Pangasinan.

The benefits to local government units hosting power plants include a fund accumulating from the setting aside of one centavo for every kilowatt hour produced and sold from the production of a power-generating plant.

While the water that runs the turbines of the 345-megawatt San Roque flows from Benguet, the province is not entitled to a share from the one-centavo-per-kilowatt-hour fund due to the definition of the term “host LGU” under the Energy Crisis Act of 1992 and, subsequently, the Electric Power Reform Industry Act.

Under the implementing rules and regulations of the EPIRA a “host LGU” is defined as and limited to where the dam was built. The fund is supposed go to the relocation and livelihood of people displaced by the construction of the facility, lowering of power rates and also enhancement of the watershed serving the dam.

A river basin-based definition of “host LGU” was suggested to then Energy Secretary Vincent Perez during a press conference here, just before a consultation on the provisions of the IRR of the EPIRA.

Over in Hungduan, Ifugao, tribal leader Reynaldo Lopez Nauyac rued that while Ifugaos have, for centuries, preserved the integrity of the headwaters of the Magat River through time-honored forest management practices, there is hardly a government incentive policy for the traditional keepers of the watersheds.

Baguilat said the issue on access to and benefits derived from natural resources found in the Cordillera can be part of the discussions during the next Igorot Global Organization international conference set this April in Banaue town.

Baguilat also called on government agencies to come up with a common policy on ownership, access to and use of natural resources. As example, he said that while the Department of Trade and Industry supports small craft industries such as woodcarving, the Department of Environment Resources sometimes restricts the transport of these products.

A similar observation was made by Prof. Lorelei Crisologo-Mendoza in a paper she presented during the First International Conference on Cordillera Studies hosted by the University of the Philippines Baguio last Feb. 7-9.

“There is a need to harmonize these conflicting state policies,” Mendoza noted, referring to those being implemented by the DENR, DTI , the agriculture and agrarian reform and other government agencies having jurisdiction over natural resources.

In another paper, Igorot anthropologist June Prill-Brett pointed out that the state has no monopoly in the exercise of law.


Ifugao rural bank offers loans to gov’t employees

LAGAWE, Ifugao -- The Lagawe Highlands Rural Bank is now offering salary loans to government employees,Fidel Dincog, manager of the LHRB said the bank decided to pursue its plan to offer salary loans to employees of local government units and other institutions.

‘The frequent requests for salary loans among employees from different offices prompted the bank to open a window for salaried clients without the need of hard collateral,” Dincog said.

Dincog said a memorandum of agreement will be executed between the bank and the institution or employer for the purpose.

He also said that employees who are permanent, 60 years old and below and must have a take home pay of not less than P3,000 after deductions can avail of the said loan.

Also known as Banco Lagawe, the bank aims to provide alternative source of loans with low interest.

With an interest rate of 15 percent and a service fee of 5 percent, Dincog said loans need the endorsement of the accountant and treasurer.

“The term of loan is 12 months to 24 months and the maximum loan amount is 1/5 or 20 percent of basic salary times the number of months to pay. -- Vency D. Bulayungan