A BETTER POLICY ENVIRONMENT is needed to help the mining sector achieve its potentials, experts said in annual industry summit on Wednesday.
“We need to awaken the full potential of the mining industry and it means shifting the government regulatory approach from a restrictive developmental policy regime… ” Victor Andres C. Manhit, president of Stratbase Albert del Rosario Institute, said during the second day of the Mining Philippines 2019 International Conference and Exhibition in Pasay City.
“Balanced environmental governance is the key to realizing and unlocking the transformative potential of resource management and sustainable mining activities.”
In the same event, Department of Environment and Natural Resources (DENR) Undersecretary for Climate Change and Mining Concerns Analiza R. Teh said: “we hope to… formulate new policies that would really be responsive to the needs of the mining industry to support their investments and at the same time ensure that environmental safeguards are properly taken cared of.”
Despite the Philippines being known as having significant mineral reserves, miners have been operating in a negative policy environment since the government in 2012 imposed a moratorium on new mining permits until a new law is enacted that gives the government a bigger share in industry revenues.
Such a measure has been re-filed in the 18th Congress and is now being discussed at the committee level in both the House of Representatives and the Senate.
Among others, the measure proposes to reduce the royalty on large-scale mining within mineral reserves to three percent of gross output from five percent currently and introduce a 1-5% margin-based royalty on those outside mineral reserves.
At present, only miners operating within mineral reserves are levied a royalty.
This will be imposed on top of other taxes like corporate income tax, excise tax which Republic Act No. 10963 doubled to four percent, the royalty to indigenous communities and local business tax, among others.
This was the same version the House approved on third reading in the 17th Congress; but failed to hurdle the Senate before the June 3 adjournment.
Pocholo C. Domondon, assurance partner of Isla Lipana & Co., said much depends “on predictability as well as consistency with respect to policy, given the fact that this is a capital intensive industry.”
Under the proposed new tax regime, small-scale miners will also be levied a royalty equivalent to one-tenth of one percent of gross output, whether the contractor operates within or outside mineral reservations.
The Bangko Sentral ng Pilipinas (BSP) is mandated by RA 7076 to purchase all gold produced by small-scale miners “at prices competitive with those prevailing in the world market regardless of volume or weight.”
“As of now, 10% of GIR (gross international reserves) is gold,” BSP Senior Assistant Governor and General Counsel Elmore O. Capule said during the conference.
Despite the currently negative policy environment, latest available data from the Mines and Geosciences Bureau showed that nickel ore production actually grew three percent to 11.306 million dry metric tons (DMT) in the first half of 2019.
Production of gold was up six percent to 11,078 kilograms (kg), while silver was up seven percent to 15,849 kg.
Copper production was also up during the period by 14% to 156,745 DMT. — Vincent Mariel P. Galang