Human Rights Online Philippines

SPECIAL REPORT: Govt eyes mining sector shakeup in bid to wrest bigger share of booty
by Orti Despuez, Special to Interaksyon.com
March 2, 2012

MANILA, Philippines — As mining companies ride on what could be the biggest boom in history, the government is trying to extract more revenues from the industry amid perceptions that the state is not getting its “fair share” from its mineral resources.

The Department of Environment and Natural Resources (DENR) said the small share that the government — including local government units (LGUs) — gets from the mining sector’s profit is the main reason for the growing anti-mining sentiment.

Under existing law, the LGUs are at the losing end, with their share of profit trimmed down to a minimum.

To maximize revenue from the mining sector, the government wants to declare more “mineral reservations.” Declaring all current mining operations, including those in advanced stages of development, as mineral reservation areas will increase government’s share from P400 million to more than P6 billion a year.

Leo Jasareno, director of the Mines and Geosciences Bureau (MGB), said the government’s share in the business is largely in the form of excise taxes at two percent of a mining firm’s profit.

But if an area were declared a mineral reservation, then the government would be entitled to an additional five percent royalty, resulting in a combined seven percent share for the government.

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