LGUs seen losing P821M from mine closures

The orders to suspend or close down 28 mining operations could cost local governments a total of more than P821.13 million a year, Finance Secretary Carlos G. Dominguez III said Monday.

Dominguez noted of higher foregone revenues based on an updated report of the Department of Finance-attached agency Bureau of Local Government Finance (BLGF) from the earlier estimate of P653.6 million.

Dominguez said the suspension and closure orders would affect 17 cities and municipalities in 10 provinces, namely Benguet, Bulacan, Cebu, Dinagat Islands, Eastern Samar, Nueva Vizcaya, Palawan, Surigao del Norte, Surigao del Sur and Zambales.

According to Dominguez, three municipalities were poised to lose revenues from mining operations that were equivalent to more than half of their current operating incomes due to the orders earlier issued by the Department of Environment and Natural Resources (DENR).

“One is the municipality of Carrascal [in Surigao del Sur], then you have Tagana-an [in Surigao del Norte] and Tubajon [in Dinagat Islands],” Dominguez said.

Based on updated BLGF data, Carrascal would lose P198.3 million of its mining revenues, equivalent to 62.3 percent of its total operating income; Tagana-an would lose P70.3 million or 54 percent of its total operating income, and Tubajon would lose P38 million or 55.4 percent of its total operating income.

“Local collections of the affected local government units (LGUs) from mining firms amounted to P340 million, comprising real property taxes (RPTs) of P53.54 million, P263.13 million from business tax, fees, charges and other local charges, and P23.29 million from provincial revenues. The share of the affected LGUs from mining taxes collected by the national government account for P481.17 million,” BLGF acting executive director Niño Raymond B. Alvina said.

“LGUs directly collect from mining firms operating in their municipalities and cities the following taxes and fees: RPTs, local business tax, mayor’s permit fee, regulatory and administrative fees and occupation fees. The provinces of the affected component municipalities are also imposing governor’s clearance, verification fee, environmental fees, soil depletion tax and processing permits for vessel,” according to Alvina.

“For the RPTs imposed by cities, the LGU gets a 70-percent share while the remaining 30 percent is shared with the barangays, of which half goes to the barangay directly affected and the other half shared equally by component barangays. For the RPTs collected by provinces, the province receives a 35-percent share while 40 percent goes to the municipality and the remaining 25 percent to barangays where the mining site is located,” Alvina added.

The latest BLGF report has yet to include the impact on revenues of LGUs that host the 75 mining sites whose mineral production sharing agreements (MPSAs) were also ordered canceled by the DENR last week.

Meantime, the Mindanao Business Council (MBC) Monday called on the government and the private sector to combine efforts in increasing the mining industry’s contributions to the economy by advocating responsible development of mineral resources.

The Davao-based group said this as Environment Secretary Regina Lopez said foreign investors were welcome, although she preferred that they put their money in projects related to biodiversity and the development of the countryside.

MBC chair Vicente Lao said in a statement that mining was a critical ingredient that would facilitate greater economic growth, attract investments, create jobs and reduce poverty in the region.

“It is our resolve to partner with the government to optimize the contributions of the mining industry and its potentials by committing to advocate for the responsible development of the mineral resources in Mindanao,” Lao said.

“The [MBC] continues to clamor for transparency and stronger accountability among the key players in the mining industry as we continue to monitor their social, environmental and economic performance,” he added.

Lao, who is also president of the Alliance of Responsible Miners, reiterated calls for “procedural transparency, fairness and the observance of rule of law” in the audit of mining operations.

“We strongly believe that the welfare and livelihood of millions of poor Filipino families in the affected mining communities should take precedent over the advocacy of a single cabinet secretary, who has manifested gross bias against the operation of a lawful industry that has contributed greatly to the upliftment of the lives and future of poor Filipinos in the countryside,” he said.

Lopez had said she was against mining, especially open-pit operations, and even more so if done by foreigners.

She said all mining in the Philippines was being done in a watershed, where “rehabilitati(on) will be almost impossible.”

However, Lopez said foreign investors who put premium on local communities and the environment were welcome to invest in the Philippines.