By Med Velasco

The Constitution says the Filipino people own the water, gas and land. The contracts, however, seem not to have received the message.

From 2002 to 2021, the Malampaya gas field paid the Philippine government about P290.8 billion, according to Department of Energy figures. Ask where the money went. You will not find a building, fund, endowment or balance-sheet line identifying what Malampaya left the country.

Malampaya illustrates the central problem: a finite public asset produced substantial revenue, but there was no protected mechanism to preserve that value after the field moved toward depletion.

What does exist is a P38-billion adverse audit finding from the Commission on Audit, roughly P900 million that reached NGOs linked to the Napoles scandal, and a gas field moving toward depletion.

If that P290.8 billion had been saved and invested at a conservative 6% real return, with the returns reinvested, it would now represent a corpus approaching P1 trillion. It could generate about P39 billion a year indefinitely without touching the principal—enough to operate a national emergency medical service, or to fulfill the promise made by Article XVI, Section 7 to veterans and their widows, a promise no administration has properly funded.

The money was not lost through a conspiracy. It was lost through a habit. And before Christmas, we are about to repeat that habit on a much larger scale.

The habit

Article XII, Section 2 of the 1987 Constitution states that all lands of the public domain, waters, minerals, petroleum, all forces of potential energy, fisheries and forests are owned by the State.

Not licensed by the State. Not regulated by the State. Owned.

A company holding a permit is a contractor working an asset belonging to the people. Yet at the negotiating table, the government behaves as though it were merely a tax collector. It asks for royalties, excise taxes and a share of declared profits.

A tax collector and an owner are not the same. A tax collector sees what the contractor declares; an owner sits on the board and sees the books. A tax collector’s revenue can be erased by a tax holiday; an owner’s dividend cannot. A tax collector negotiates a percentage of another party’s business. An owner charges rent for everything that business requires and cannot obtain elsewhere.

Countries that converted finite resources into lasting wealth understood this distinction. Norway does not simply tax oil: the State takes a direct ownership share in the licences and also owns two-thirds of Equinor. Malaysia vested its petroleum in Petronas outright. Indonesia required majority domestic ownership of Freeport’s Grasberg mine. Botswana owns half of Debswana and 15% of De Beers itself.

The Philippines has the strongest ownership language of these countries written into its Constitution—and the weakest expression of that principle in its contracts. Apart from a single 10% stake in Malampaya, the State owns nothing involved in working its own patrimony.

The part that should make you sit down

Consider water.

Article XII, Section 2 says that waters are owned by the State. Under the Water Code, the National Water Resources Board issues abstraction permits in exchange for an administrative fee. There is no charge for the resource itself.

None.

The Constitution says the nation owns the water. In practice, we hand it over for the cost of processing paperwork.

That brings us to New Clark City. The proposed Pax Silica economic security zone in Capas and Bamban, Tarlac, covers about 1,620 hectares. It is intended to represent the Philippines’ entry into the US-led semiconductor and artificial-intelligence supply chain and will be one of the largest single industrial demands on water and power that the country has ever authorized.

No one outside the negotiations can say how large that demand will be. Published estimates of the zone’s water requirement range from roughly 19 million liters per day to more than 130 million liters. None has been confirmed by the Bases Conversion and Development Authority. The framework agreement remains unsigned, and the government is targeting November for it.

The country is about 10 weeks from the signing, yet the public does not know how much constitutionally Filipino-owned water is being committed in a province where farmers irrigate rice. Whatever the eventual volume, the price remains the same: the cost of the permit.

The power requirement is not an estimate. The zone is reported to need at least 5,000 megawatts (MW). Luzon’s peak demand this May reached 13,881 MW, compared with 13,508 MW of available capacity. The grid went on red alert and could not meet demand. Pax Silica would add more than one-third on top of that level, while only about 1,700 MW of new capacity is planned to serve it.

This is not an argument against Pax Silica. The industrial case is real, the geopolitical opportunity is real, and Central Luzon needs the jobs. The argument is that the Republic should determine what it is selling—and charge for it—before signing.

That must happen in November. The framework agreement will not itself be a lease, but it will establish the terms on which locator leases are written. Under the Investors’ Lease Act, those leases run for 50 years and may be renewed for 25 years. Rent left uncharged at the framework stage is rent left uncharged throughout the zone’s working life.

We have about 10 weeks.

Where does the money go?

Suppose all of this is corrected. The State takes a carried interest, prices the water, charges rent for the seabed, steam and public land, and enforces the 60-40 rule as the Supreme Court interpreted it in Gamboa and Narra Nickel—tracing beneficial ownership through every holding company rather than accepting a certificate signed by a nominee.

Where should the surplus go?

Not into the General Fund. That is where Malampaya went to die.

And, to put it plainly, not into Maharlika. This is not an accusation against anyone there; it is a statement about the fund’s design. Its directors are presidential appointees, and its chair is a sitting Cabinet secretary. No money flows into it automatically. Its principal is not locked, it has no statutory spending rule, and it invests domestically, including in companies regulated by the same government.

Those characteristics may be reasonable for a development investor. They are disqualifying for a trust holding the liquidation value of assets that the country will never own again.

What is needed is a separate Philippine Natural Patrimony Fund. Its money should flow in by force of law rather than through annual decisions. Its principal should not be touched. Its board members’ terms should extend beyond the President who appointed them. It should undergo continuous audit under Article IX-D, from which no law may exempt it. It should also have a citizens’ panel with the legal right to publish dissenting views.

Consider Alberta. Its fund was never stolen. It simply stopped receiving contributions—quietly, through ordinary political decisions made over decades. Starvation can kill a sovereign fund just as surely as theft.

None of this needs charter change

That is the excuse you will hear, so it should be answered now.

Everything described above can be accomplished through ordinary legislation. State ownership is already established in Article XII. The host communities’ share is already provided for in Article X, Section 7. The audit that Congress may not waive is already required under Article IX-D.

Even the argument that an automatic earmark would violate the power of the purse has a clear textual answer in Article VI, Section 29(3), which expressly contemplates special funds.

Republic Act 12253, the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, took effect on Feb. 17, 2026. It contains no earmark. A two-page bill could correct that during this session.

The Philippines is not a poor country. It is a landlord living in one room of its own building, collecting only a fraction of the rent and wondering why it cannot afford repairs.

The lease on the largest unit is being signed in November.

Capt. Med Velasco (Ret.) is a former Philippine Air Force fighter pilot and an aviation and emergency-services consultant. He writes on natural-resource governance and public-service delivery.