MANILA, Philippines ? The Commission on Audit (COA) has refused to audit oil companies because its mandate supposedly covered only government firms, Energy Secretary Angelo Reyes said on Tuesday.

Reyes? statement before the Senate committee on energy hearing oil prices baffled Senate President Juan Ponce-Enrile and Senator Joker Arroyo.

?Your honor, I wrote to the chairman of the Commission on Audit inquiring whether they would, they would want or they could audit the oil companies and they replied in the negative,? he said.

?They said that it?s not within their mandate. Their mandate is to audit government firms, your honor. I?d have gladly directed the Commission on Audit to audit them but they said it?s not within their mandate,? he pointed out.

But Enrile said that under the law, the President could direct the auditor-general ?to check the operations of any corporation in the country to protect public interest as a part of our system of check and balance.?

?I think it was in the corporation law. The President has that power. They call it the visitorial power of the President,? he said. ?If it?s not in the corporation law, it?s somewhere in our legal system.?

Senator Arroyo then asked Reyes if the oil companies did not only want to be audited by the government.

?Mr. Chairman, during my term I have them audited by SGV and I went to SGV myself and talked to the chairman and requested that the service be extended pro bono,? said Reyes, referring to the country?s top auditing firm.

?But SGV is the auditor of these companies, most of them. How can you expect SGV to come up with a correct report about its clients? Just like you are asking a lawyer to make a statement against his client? No way,? Enrile said.

If the COA has no power over these oil firms, then the Senate leader said the government should direct the Bureau of Internal Revenue to ?dissect? their operations.

?That?s their purpose. They have a peculiar interest, specific direct interest to find out whether indeed these companies are reflecting their true taxable income,? he pointed out.

But Reyes said the BIR was not under his jurisdiction.
?But you are in charge here, in the interest of the nation. That?s your duty as a member of the Cabinet,? Enrile pointed out.

?We?re not talking here of collection of taxes. We?re talking here of whether the pricing system of these companies is reasonable as far as the consuming public is concerned. I?m not saying that they are cheating. What I?m saying is, are they really reflecting a true financial picture of their operation so that they could justify a pricing system??? he further said.