Property rules

Unshackling the golden handcuffs

/ 04:45 AM September 07, 2019


Proposed mineral agreements (MA) shall be filed in the region where the areas of interest are located, except in mineral reservations which shall be filed with the Mines and Geosciences Bureau (MGB).


Upon filing his proposal, the proponent shall enjoy prior right to the proposed areas. Meanwhile, the Department of Environment and Natural Resources (DENR) Secretary shall approve the proposal and submit copies thereof to the President. Thereafter, the President shall provide Congress a list of the approved proposals within 30 days from said approval.

Rights and obligations under any MA may be assigned or transferred, subject to the Secretary’s approval. Such assignment or transfer shall be deemed automatically approved if the Secretary would fail to act on it within 30 working days from notice, unless it is patently unconstitutional or illegal.


During the MA’s term, the contract may apply for its cancellation with the Secretary for causes which, in his opinion, make continued mining operations no longer feasible or viable. The Secretary shall consider the application for as long as the contractor has met his financial, fiscal and legal obligations.

MAs shall be effective for a term not exceeding 25 years from the date of their execution, and renewable for another term not exceeding 25 years, without prejudice to the terms and conditions that may be subsequently agreed upon by the parties. After the renewal period, the government may either undertake to supervise the mining operations or delegate the same to the contractor or the highest bidding contractor in a public bidding. Meanwhile, the contractor shall have the right to equal the highest bid upon reimbursing the highest bidder’s reasonable expenses.

Meanwhile, the Supreme Court defined a financial or technical assistance agreement (FTAA) as a contract involving financial or technical assistance for large-scale exploration, development and utilization of natural resources. A foreign corporation with technical and financial capability to undertake such large-scale operations in the Philippines may qualify to enter into a FTAA directly with the government, through the DENR.

All FTAA proposals shall be filed with the MGB after the payment of the required processing fees. If the proposal were found sufficient and meritorious in form and substance, it shall be recorded with the appropriate government agency to give the proponent the prior right to the area applied for. Such prior right, however, shall not prejudice existing MAs, FTAAs and other mining rights.

A FTAA shall likewise have a term not exceeding 25 years, renewable for not more than 25 years under such terms and conditions as may be provided by law.

At any time during the term of the FTAA, the contractor may opt to convert it to a MA if the economic viability of the contract were found inadequate to justify large-scale mining operations, after proper notice to the Secretary. The MA, however, shall only be for the remaining period of the original agreement.

A FTAA may be assigned or transferred to a qualified person, subject to the President’s approval. Thereafter, the President shall notify the Congress of every FTAA assigned or transferred within 30 days from the date of such approval.


The contractor may withdraw from the FTAA in writing to the Secretary if in his judgment, the mining project were no longer economically feasible, despite exercising reasonable diligence to remedy the cause or the situation. The Secretary may accept such withdrawal, for as long as the contractor has complied with all his financial, fiscal or legal obligations.

In executing these agreements, a contractor shall likewise: (a) assist in the development of its mining community, promotion of the general welfare of its inhabitants, and development of science and mining technology; (b) encourage Filipinos to participate in all aspects of mining operations; (c) prefer to use local goods, services, and scientific and technical resources in the mining operations; and (d) prefer to employ Filipino citizens insofar as they are qualified to perform the corresponding work with reasonable efficiency and without hazard to the safety of the operations.

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