THE NEW mining revenue sharing formula is scheduled for presentation the Office of the President for approval this month, in time to find a sponsor and have a bill on the proposed sharing scheme passed by July, according to Mines and Geosciences Bureau (MGB) director Leo Jasareno.
Jasareno, a member of the Mining Industry Coordinating Council (MICC) which was set up to implement the government’s new mining policy, said at a recent mining forum that the technical working group created to prescribe a new revenue sharing scheme was set to present its output in the next meeting.
He said a draft bill on the new scheme would be filed in Congress “as soon as it resumes session in July of this year.”
The new revenue sharing scheme is much awaited in the mining sector. Investors are on a “wait and see” mode and without the said scheme, they may consider putting their resources in other countries, according to the Chamber of Mines of the Philippines. With a legislation on this, the government will likely start accepting permit applications for various forms of mining.
Also this year, Jasareno said, a multisectoral team in every region of the MGB would be established. The teams will review the performance of existing mining operations in their respective areas every two years, focusing on environmental compliance. Works leading to the establishment of more mineral reservations are also ongoing, Jasareno said.
The MICC is an inter-agency body composed of representatives from the Cabinet’s Climate Change Adaptation and Mitigation and Economic Development clusters, the justice department, National Commission on Indigenous Peoples and the Union of Local Authorities of the Philippines. All changes to the fiscal incentives regime will be applied “prospectively,” MICC members have said.
Several schemes have been floated, the latest of which is a 10 percent government share in a mining company’s gross revenue plus a share in any windfall earnings (on top the usual or recurring income from operations).
Environment Secretary Ramon JP Paje said the new scheme would “level the playing field,” noting that out of about 31 medium- and large-scale miners of metallic minerals, about 11 large-scale companies were paying a 5-percent royalty on top of the 2 percent excise tax under existing laws.
At the same time, incentives for mining operations such as tax holidays will likely be scrapped, according to officials asked about recent meetings of the MICC.
In 2012, Philippine metallic mineral production value dropped by nearly 20 percent amid taxation issues, delays in new mining legislation that would pave the may for new projects, the suspension of some large operations and the continued opposition of certain sectors to various forms of mining. Data on 2012 metallic mineral production from the MGB showed that total output value plunged 18.04 percent to P100.8 billion in 2012 from P122.98 billion in 2011.