This is a natural part of wood decay that can't be treated, as no pesticide (not that we would recommend applying one) would affect the insects inside the wood. (The same applies to fungi that will eventually colonize the weathering wood, if they haven't already, even if mushrooms are not yet evident.) Applying some sort of water-resistant sealant or stain when the wood was fresh-cut might have helped, but we don't think trying that now will have much benefit, though it may slow further deterioration if you wanted to attempt it. Any wood-boring insects (likely beetles in this case, given the hole type and size) already in the wood once it is sealed might still emerge and would create new holes as the adult insect leaves the wood. Wood borer tunnel holes are a valued resource for many solitary cavity-nesting native bees that pollinate many of our wildflowers and even cultivated plants, so it's a good habitat element to provide, if possible.

Miri

Thanks 
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