EO 79 ‘not needed’, now under review: MGB head

Posted on August 26, 2016

THE CHIEF of the Mines and Geosciences Bureau (MGB) said the 2012 executive order (EO) that detailed changes to the country’s mining policy and effectively stalled the issuance of new permits, is not necessary.

CHAMBER of Mines of the Philippines President Benjamin Philip G. Romualdez gestures as he delivers remarks at a business conference. -- BW FILE PHOTO
“I’ll be put in hot water for this but EO 79 is something I believe is not needed. [It seems] somebody did not want to act on anything,” MGB Concurrent Director Mario Luis A. Jacinto said yesterday.

Mr. Jacinto said his agency is set to review the order, which former President Benigno S. C. Aquino III signed in July 2012. EO 79 was aimed at ensuring a more responsible industry and getting a larger share of the sector’s revenues. It halted the issuance of mineral agreements until a new revenue sharing scheme is passed into law.

The Mining Industry Coordinating Council (MICC) -- the Malacañang-created body tasked to implement EO 79, filed its version of the revenue scheme with the last Congress. The bill provided that the government, as owner of the country’s minerals, will get each year 10% of a miner’s gross revenues or 55% of “adjusted net mining revenues,” whichever is higher; and 60% of any windfall profit. However, the proposal did not move past the committee level.

“We are looking into the key provisions… What has it (EO 79) accomplished in the years that it has been in place? The intention... we’re looking now into the minutes of the meetings of the Mining Industry Coordinating Council,” Mr. Jacinto said.

“Is it really needed? What would be the immediate recommendations so far as EO 79 is concerned? Will there be effective monitoring or moratorium on the issuance of new permits is really the best interest of the country?” the MGB chief added.

Mr. Jacinto’s view jibes with that of the Chamber of Mines of the Philippines (COMP), which has been calling for the repeal of the law.

“I think the view of the industry has been very well known, that we believe that the tax rate in the Philippines is already very challenging already,” said COMP President Benjamin Philip G. Romualdez during the second day of the annual mining summit.

Under the current revenue-sharing scheme, the government gets a 50% share in profits of foreign miners operating in the Philippines under financial or technical assistance agreements, and a 2% excise tax on actual market value of output under mineral production sharing agreements with local companies.

Mr. Romualdez added that miners do not only contribute to mining communities by way of tax partitions, but also through social development programs that are mandated under existing laws.

“If government looks at taxation, how can they make it more responsive as an incentive for companies to take the financial risk in the area?” -- J.C. Lim