BATANGAS, Philippines (AP) — The Philippines is in the midst of a major expansion of natural gas flows at a time when scientists say the world urgently needs to phase out fossil fuels because of climate change. Analysts say Filipinos are likely to pay more for their electricity and future needs could have been met with clean renewable energy sources.
An Associated Press investigation found that a major proponent of natural gas, Gov. Hermilando Mandanas of Batangas Province, would benefit from the expansion.
Here are the key takeaways from AP’s report:
The project
The government has ambitions to make the Philippines a liquefied natural gas hub for the Asia-Pacific region. And Batangas province is at the heart of where this is happening.
Four gas-fired power plants are located along the coastline, about two hours south of the capital Manila, and four more are planned. Six new terminals for the import of chilled and liquid gas are underway or already operational.
Mandanas told the AP that the electricity is desperately needed for development that will benefit the entire Philippines.
The Mandanas family interest
Mandanas owned the largest stake in a real estate company, AbaCore Capital Holdings Inc., which rose in value as energy companies entered the market. The governor promoted the expansion in media interviews and public events. And AbaCore launched its own natural gas project.
Mandanas led a takeover of AbaCore in the 1980s, building it into a real estate giant 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 Mandanas still owned nearly 30% of the company last fall.
Reyes was open about her husband’s policies that benefited 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 has a major stake. The AbaCore affiliate and three Chinese companies agreed to build a $3 billion LNG complex in the fishing village of Simlong. Four of the group’s properties, including the land on which the energy hub will be built, were valued at $6.2 million before the deal. Then they were rated five times as highly.
Mandanas said that “probably one of the subsidiaries sold some real estate” to the developers, indicating a waiver on the transaction. He denied that his member companies are involved in the construction and called natural gas the best choice for the country. And he said AbaCore “does not deal with any energy sector here in Batangas.”
What ethics experts say
Legal experts say the transactions violate the Philippine law on ethics in public offices and possibly the national law on local government. Philippine politicians are not allowed to own major stakes in companies with objectives that could conflict 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 for Autonomy and Governance, called the situation a clear conflict of interest that could justify Mandanas’ suspension or dismissal.
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 amount to a conflict of interest and the “abuse of entrusted power for personal gain , thus ensuring the public interest.”
Barnaby Pace of the nonprofit Center for International Environmental Law said LNG projects should be reviewed in light of the information.
___
The Associated Press’ climate and environmental reporting receives funding from several private foundations. AP is solely responsible for all content. Find AP’s Standards for Working with Charities, a list of supporters, and funded coverage areas at AP.org.
