Use the money well
As oil and natural gas rush out of the wells in Alegria town, the question of money inevitably crops up. Alegria Mayor Verna Magallon ticked off for Sun Star Cebu the sharing scheme: 60 percent of the income will go to the National Government, while 40 percent goes to the extractor, China International Mining and Petroleum Company, Inc. (CIMPI).
In turn, the National Government’s 60 percent share will be divided into three: 18 percent will go to the Alegria Municipal Government, 14 percent will go to Barangay Montpellier, which hosts the oil field, while 8 percent will go to the Cebu Provincial Government.
The slices in the cake Alegria and Montpellier are getting may look small but considering the product being extracted, these are worth millions of pesos. For local government units (LGUs) used to getting a small amount of revenues and shares from the internal revenue allotments (IRA), that can be considered a windfall.
But while the oil reserve there is of commercial quantity, the supply is not endless. According to CIMPI, the oil fields could last about 19 years, a relatively short production span. That is why the LGUs getting the windfall should use the money earned wisely.
Magallon talked about raising the town’s spending on basic services, like extraction of potable water, electrification of remote areas, distribution of free medicines, etc. But considering the short lifespan of the oil field, focus must also be given on projects that would push upwards the town’s economic growth.
On this, it would be good if Magallon and town officials would consult with the provincial government and officials of concerned government agencies, like the Department of Trade and Industry and the Department of Agriculture. Magallon, for example, talked about propping up the town’s organic farming program and its promotion as “Organic Vegetable Basket” in Cebu but more can be done.
Projects that pump-prime the town’s economy need to be given attention so that when the oil supply has been used up, substantial growth will already allow the town to move forward even without the oil production share.