Mining, quarrying revenues decline 12% to P57 billion in 2019

MANILA, Philippines — The government generated 12 percent less revenue from extractive industries to about P57 billion in 2019 due to lower output of mining and quarrying.

Multi-stakeholder initiative Extractive Industries Transparency Initiative (EITI) yesterday reported the gross value added (GVA) of mining and quarrying fell by more than one percent to P144.22 billion in 2019 from P146.18 billion in 2018.

Finance Undersecretary and EITI chairman Bayani Agabin said the contribution of the extractive sector to the economy slightly dipped to 0.6 percent from 0.69 percent.

Further, revenue generated by the government from extractive business slid by over 12 percent to P56.7 billion, from P64.56 billion.

Broken down, the oil and gas industry registered a decline of roughly 18 percent to P34.56 billion, while  revenue from metallic mining slipped by above seven percent to P11.09 billion.

On the other hand, income from non-metallic mining grew by nearly six percent to P11.05 billion.

Agabin attributed the decrease in extractive revenue to reduced collections from state agencies, especially the Bureau of Internal Revenue (BIR), as well as challenges in submitting documents during the pandemic.

“The decrease was due to lower collections by our government agencies. The BIR, in particular, posted lower collections from oil and gas projects. This is consistent with the GVA for oil and gas that fell by 52.6 percent in the period,” Agabin said.

“There were also challenges in the submission of support documents due to the alternative work arrangements, [and] this affected the reconciliation process,” he said.

On the other hand, extractive firms increased their environmental and social expenditures by at least 27 percent to P4.3 billion in 2019, from P3.38 billion in 2018. According to Agabin, metallic mines contributed 91 percent of the spending, while non-metallic mines made up the remaining nine percent.

Finance Assistant Secretary and EITI alternate chairman Maria Teresa Habitan said non-metallic mines sustained operational injuries from the pandemic, as their volume of production fell by 50 percent. On the contrary, around 75 percent of metallic mines reported little to no impact from the health crisis.

“The metallic mining sector, therefore, is relatively resilient to extreme conditions, such as the COVID-19, a precursor for the sector to also take on long-term risks in the future,” Habitan said.

Within the decade, Habitan said the lifting of the moratorium on mining projects, as enforced by Executive Order 130, may boost mineral production by some P15 billion yearly until 2023, and by an additional P43 billion annually until 2027.