Group prepares mining revenue-sharing bill

MANILA, Philippines - An inter-agency group tasked to draft a mining revenue-sharing legislation is hoping to have the measure ready by the 2013 elections, a Finance official said yesterday.

The Department of Finance (DOF) and the Department of Trade and Industry (DTI), with the National Economic and Development Authority (NEDA) and the Mines and Geosciences Bureau are members of the inter-agency group.

A Finance official said the group has yet to start working on the draft as both the DOF and the DTI are still threshing thorny issues on how to split the revenues between the government and mining firms.

“There’s no draft yet. Hopefully, we can have it before the elections,” said the Finance official. Once the draft is ready, the group would submit it to the Ways and Means committees of both chambers of Congress for sponsorship.

The agencies have yet to finalize their respective inputs for the mining revenue-sharing scheme draft legislation but what is clear is that the inter-agency group aims to harmonize all national and local policies and programs related to mining. It also wants to develop the framework for increased domestic processing of minerals and development of related industries.

The new scheme will strive to strike a balance between raising government revenue and keeping a competitive fiscal regime. Options for computing government share include the current system of imposing an excise tax, getting a percentage of net mining revenue and a scheme similar to the petroleum fiscal regime for oil and gas exploration.

The House of Representatives’ think-tank, the Congressional Policy and Budget Research Department has recommended the implementation of the natural resources valuation, options for benefit-sharing schemes, measuring local economic impact, a genuine and inclusive process of obtaining free and prior informed consent.

 “There must also be clear and measurable indicators to track compliance and progress in reforms needed for responsible mining, including inclusiveness of economic benefits, as well as social, cultural and environmental safeguards. The government needs to design and implement a systematic monitoring and evaluation process based on these indicators,” it said in its study titled Charting Growth Directions for the Philippine Mining Sector.

Furthermore, it said that implementing the right mix of policies toward the proper development of the mining industry is an essential first step that the Philippines must undertake to realize better outcomes from the continued use and exploitation of its mineral resources.

The study noted that in 2010, government revenues from mining amounted to P13.4 billion out of total production value of P145 billion.

This amounted to P10.4 billion in 2011, out of the total production value of P163.2 billion.