BATANGAS, Philippines (AP) — The Philippines is involved in a major natural gas power development at a time when scientists say the world urgently needs to phase out the use of fossil fuels due to climate change. Analysts say Filipinos will likely pay more for their electricity and that additional future needs could have been met with clean renewable energy.
An Associated Press investigation found that a big cheerleader for natural gas, Gov. Hermilando Mandanas of Batangas province, would benefit from the construction.
Here are the key takeaways from AP Report:
The project
The government has ambitions to make the Philippines a liquefied natural gas hub for the Asia-Pacific region. And the province of Batangas is at the center of everything that is happening.
Four gas-fired plants are along the coast, about two hours south of the capital Manila, and four more are planned. Six new terminals for importing chilled and liquefied gas are underway or already in operation.
Mandanas told AP that electricity is critically needed for development that will benefit the entire Philippines.
The interest of the Mandanas family
Mandanas held the largest stake in a real estate company, AbaCore Capital Holdings Inc., whose value soared as energy companies set up shop. The governor promoted the expansion in media interviews and public events. And AbaCore launched its own natural gas project.
Mandanas led the acquisition of AbaCore in the 1980s, transforming it into a real estate giant that goes beyond its original interests in mining and gaming. When he was elected governor in 2016, he stepped down as CEO and his wife, Regina Reyes, took over. But company documents show that as of last fall, Mandanas still owned nearly 30% of the company.
Reyes has been open about her husband’s policies that benefit the family business. She told shareholders in 2019 that programs “implemented and led” by her husband would boost AbaCore.
A deal signed in 2019 involved a sister company of AbaCore in which Mandanas now holds a large stake. AbaCore affiliate and three Chinese companies have agreed to build a US$3 billion LNG complex in the fishing village of Simlong. Four properties owned by the group, including the land where the energy center will be built, were valued at $6.2 million before the deal. They were then re-evaluated five more times.
Mandanas said that “probably one of the subsidiaries sold a property” to the developers, indicating a distance from the transaction. He denied that his associated companies were involved in construction and considered natural gas the best choice for the country. And he said AbaCore “does not engage in any energy business here in Batangas.”
What ethics experts say
Legal experts said the negotiations violate Philippine law on ethics in public office and possibly national law on local government. Philippine politicians are not allowed to hold major stakes in companies for purposes that may be at odds with their official duties. Governors must maintain a balanced ecology and conserve marine resources.
Michael Henry Yusingco, a lawyer and fellow at the Philippine Institute of Autonomy and Governance, called the situation a clear conflict of interest that could merit Mandanas’ suspension or removal from office.
Elizabeth David-Barrett, director of the Center for the Study of Corruption at the University of Sussex, England, reviewed the AP’s findings and agreed with Yusingco that they constitute a conflict of interest and the “abuse of entrusted power for private gain that harms the interest public.”
Barnaby Pace of the nonprofit Center for International Environmental Law said LNG projects should be reviewed in light of the information.
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