EXECUTIVE officials overseeing the country’s mining sector  will meet later this week to identify more ways to buoy the industry amid a standing moratorium on new permits, an official of the Mines and Geosciences Bureau (MGB) said last week.

MGB Director Leo L. Jasareno said the Mining Industry Coordinating Council (MICC) is tentatively set to meet on Oct. 23 to discuss “interventions” the government can employ pending the passage of a mining revenue-sharing law — the requirement set under Executive Order (EO) No. 79, signed by President Benigno S.C. Aquino III in July 2012, before new permits are granted. “The Mining Industry Coordinating Council will be meeting in the third week of October… We will be mapping out strategies up to the end of the term of the President with respect to the implementation of EO 79,” Mr. Jasareno said in an interview on the sidelines of recently concluded budget hearings in the House of Representatives.

The meeting is tentatively set on Oct. 23 the MGB official confirmed by phone last week.

“Since in place ‘yung EO 79 and we are implementing it, ‘yung MICC titingnan kung ano ang mga interventions na pwedeng gawin (The MICC is looking at interventions the government can employ)… Ngayon kasi, while we have the moratorium, meron ding mga complementary provisions ‘yung EO 79 that are able to help the industry.”

The window for legislation has been narrowing, with less than four months left for Congressional sessions ahead of the May 2016 national elections.

The House is currently taking up three versions of a new mining revenue-sharing scheme, one of which was the proposal drafted by the MICC that was submitted to Congress in February.

To recall, the MICC version, filed as House Bill (HB) No. 5367, will collect either 10% of a miner’s gross revenues or 55% of “adjusted net mining revenues” (ANMR: gross revenue less production and other deductible costs but not to exceed 10% of direct mining, milling and processing costs), whichever is higher; and 60% of any windfall profit (in case the “ANMR margin” — ANMR divided by gross revenue — exceeds 50%, the government gets 55% of that threshold of 50% of gross revenue plus 60% of the excess).

While this is in lieu of several taxes, miners must still pay value-added tax, capital gains tax, stock transaction tax, documentary stamp tax, withholding tax on passive income, donor’s tax, environmental fee, real property tax, Securities and Exchange Commission fee, water usage fee, as well as administrative and judicial costs and penalties.

The bill has been opposed by miners who argue that the rates are too steep and “absurd” when compared to those levied by the country’s competitors for investors.

NO MORE TIME
House Speaker Feliciano R. Belmonte, Jr. has hinted of lack of time for approving the bill. “‘Yung mining bill, we can probably still pass it, but this is a very short period and after discussions with the industry, in fact, mas gusto ng industry is a longer discussion than what is here,” Mr. Belmonte said recently. “In fact, ‘yung proposals that are on the table here are opposed by some of the mining companies at sabi nila… bigyan natin ng pagkakataon na suriin uli ‘yung whole question in the next Congress (who said… we should give the next Congress an opportunity to study the whole issue again).”

The proposal is significantly heavier than the current revenue-sharing formula, where the government gets a 50% share in profits of foreign miners operating in the Philippines under Financial or Technical Assistance Agreements, and a 2% excise tax on actual market value of output under Mineral Production Sharing Agreements (MPSAs) with local companies.

Two other proposals are also being considered by the chamber, namely:

• HB 3586 filed by 1-BAP party-list Rep. Silvestre H. Bello III and Taguig Rep. Lino S. Cayetano (2^nd district) that seeks a 60% revenue share for the national government and 15% for the host local government; and

• HB 5843 of Deputy Speaker Carlos M. Padilla (Nueva Viscaya) that proposes a 5% mining royalty, 10% cash flow surcharge and 5% ore export tax on top of various national and local taxes.

All three measures are pending before the House Ways and Means committee.

However, committee chairman and Marikina Rep. Romero Federico S. Quimbo (2^nd district) said in a recent text message that the committee can still pass a new mining bill, which will be prioritized for legislation when sessions resume next month.

Despite the delays, Mr. Jasareno said that the MICC is still hopeful its version will be approved.

MORE HELP SOUGHT
Mr. Jasareno said that the inter-agency council hopes to draw up contingency measures beyond those that have already been provided. Among others, the MICC is in the process of approving applications for area expansions for existing MPSAs following an administrative order signed by Environment Secretary Ramon J.P. Paje on April 2.

Total investments for the mineral sector stood at $693.1 million in 2014, according to latest available MGB data — 76% short of the government’s $3-billion projection for the full year and barely half the $1.45 billion recorded in 2013.

The mining sector has contributed a mere 0.58% to the country’s gross domestic product from 2010 to 2013, according to the first Philippine Extractive Industries Transparency Initiative (PH-EITI) Country Report published last year, which is deemed low “relative to its potential.”

The country ranks as the fifth most mineralized country in the world with an estimated reserves value of $1.387 trillion, the PH-EITI report said, bulk of which consists of gold, nickel, and copper.

The moratorium on new mining permits has been in place since 2011 and was extended indefinitely through EO 79 which Mr. Aquino signed on July 6, 2012.

Source: www.bworldonline.com