Mineral-rich LGUs to get P10 billion development fund

MANILA, Philippines —  Local government units (LGUs) whose resources are “harnessed commercially” may receive P10.1 billion in development funds for the fiscal year 2023, a lawmaker said yesterday.

“The amount covers 40 percent share of LGUs in the national treasury’s gross earnings from mining taxes, royalties from mineral reservations, forestry charges and revenues from renewable power assets,” Rep. Johnny Pimentel of Surigao del Sur said.

Pimentel, whose district hosts nickel mining activities, said the fund sharing is in accordance with the Local Government Code of 1991 and Renewable Energy Law of 2008.

“The P10.1 billion is 80 percent higher than the P5.6-billion share of the LGUs this year, and is provided for under the 2023 National Expenditure Program,” Pimentel said.

He attributed the windfall from the use of natural resources to elevated global metal prices and the doubling of the excise tax rates on minerals, mineral products and quarry resources from two to four percent as provided under Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

In April 2021, former president Rodrigo Duterte lifted the nine-year freeze on the grant of new mining permits in order to boost government income, spur job creation and hasten the country’s economic recovery from the impact of COVID-19.

In December 2021, the Department of Environment and Natural Resources removed the four-year ban on open pit-mining for copper, gold, silver and complex ores.

Under the law, the LGUs’ share from the commercialization of resources will be 20, 45 and 35 percent to the host province, component city or municipality and barangay, respectively.

In cases wherein the host is a highly urbanized or independent component city, 65 percent will go to the city and 35 percent to the barangay.

Once the LGUs receive their shares, they are required to appropriate the funds for local development and livelihood projects.

Local government units that obtain their shares from hydrothermal, geothermal and other energy assets, they are required to spend at least 80 percent of the money solely to lower the cost of electricity in areas that supplied the resources.