‘Corruption’ at San Roque Dam

BEHIND THE SCENES

Alfred P. Dizon

Where there is smoke, there is fire. In the case of the San Roque dam in San Manuel, Pangasinan – where there is water, money flows away.

With Congress back in its 3rd regular session, Bayan Muna Rep. called on the House committee on local government chaired by Negros Oriental Rep. George Arnaiz to “immediately conduct hearings on the abrupt reduction of the national wealth share from San Roque Dam operations to headwater host local government units of Benguet.”
               

Vince Borromeo, from the office of Rep. Casino sent us a copy of House Resolution 2098 urging the House committee on good government and public accountability to conduct an inquiry, in aid of legislation on possible irregularities on the matter. 

According to HB 2098, in 2010 the provincial government of Benguet sought an increased share from the taxes generated by the operation of the 345-megawatt San Roque multi-purpose dam in San Manuel, Pangasinan, invoking the fact that the water, the main ingredient in power generation, comes from the watersheds of Benguet.

               

The House resolution cited Benguet Gov. Nestor Fongwan as saying that increasing the province’s share from the national wealth tax being paid by the operator of the second biggest dam in Asia will be utilized to implement more development projects within the host communities.

               

In 2007, the resolution added, Gov. Fongwan was able to work out a 50-50 sharing of the national wealth tax from the operations of the San Roque dam is located within the boundary of Benguet and Pangasinan provinces.

               

The basis of the equal sharing originated from the fact that while the dam is located in San Manuel, Pangasinan, the dam’s reservoir and watershed is hosted by Itogon, Benguet;

               

According to Casino, the state policy on the national wealth tax, 60 percent is retained by the national government while 40 percent will be shared by the host provinces, municipalities and barangays (villages) as specified in Section 287 (A) of the Tax Reform Act of 1997 (Republic Act 8424);

               

The same law stipulates in Sec. 287 (B) that Local Government Units shall have a share, based on the preceding fiscal year, from the proceeds derived by any government agency or government-owned or controlled corporation engaged in the utilization and development of the national wealth based on the following formula, whichever will produce a higher share for the local government unit: one percent of the gross sales or receipts of the preceding calendar year, or 40 percent of the excise taxes on mineral products, royalties, and such other taxes, fees or charges, including related surcharges, interests or fines the government agency or government-owned or -controlled corporations would have paid if it were not otherwise exempt.

               

Casino said Sec. 287 (C) states that the share in the preceding section shall be distributed in the following manner where the natural resources are located in the province: province - twenty percent; component city/municipality - 45 percent and barangay at 35 percent.

               

Provided, however, that where the natural resources are located in two or more cities, the allocation of shares shall be based on the formula on population and land area as specified in subsection (C)(1).

               

Where natural resources are located in a highly urbanized or independent component city, the sharing would be 65 percent while the barangay gets 35 percent.

               

HB 2098 said officials of Barangay Dalupirip, Itogon, Benguet, passed Resolution No. 125, s. 2011 on December 3, 2011 requesting Rep. Casino to seek an inquiry on the sudden reduction of the village’s National Wealth Tax Share (NWTS)from the operations of the San Roque Dam.

               

“The barangay officials were aghast when they found out that on May 11, 2011 their NWTS for the first quarter of 2011 was a measly P52,279.76 only. This is a sudden reduction of almost 99 percent of the actual quarterly amount ranging from P1,107,000 to P1,108,000 that Dalupirip received in the past years,” the House resolution said.

               

“After seeking clarifications and getting no answer from local government officials in the municipal and provincial levels, the barangay officials are now in a quandary as to how they shall accomplish the development projects in their area that are dependent on the NWTS and their much smaller internal revenue allotment (IRA) share;

               

“The sheer and sudden reduction of the NWTS of the said barangay in Itogon, Benguet is a sore thumb in the current government’s drive to make governance and state finance transparent and graft-free;

               

“This matter is a possible case of corruption by state officials involved in the implementation of our country’s tax laws, local government code and in the financial operations of the San Roque Dam. Congress can and should intervene to uncover the real story and in the process come up with remedial legislation for further transparency and accountability,” HB 2098 concluded.