Philippine mining review sets off fierce debate

A Philippine government bid to take a greater share of mining revenues amid the global commodities boom has set off a storm of debate, with industry mounting an intense campaign to knock it down.

President Benigno Aquino had intended to sign an executive order endorsing the regulations to raise taxes on the mining sector at the end of last month, but delayed it as opposition from industry's biggest players raged.

Nevertheless, Finance Secretary Cesar Purisima, a key driver of the plan, has continued to insist Mining Inc does not pay enough taxes, and that other reforms are needed to improve what is a chaotic and often unregulated industry.

"In the past, the way the laws were implemented, it was not a true win-win situation where the government was able to get its fair share from mining activities," Purisima said shortly after the signing deadline was missed.

Purisima told reporters that the government collected a mere two billion pesos ($47 million) from the industry in 2011 compared with about 1.2 trillion pesos in national tax collections, or just 0.17 percent of total taxes.

"You really have to ask yourself whether the way we're implementing (mining policy) is a responsible way of harnessing the wealth of the country," he said.

One of the key draft provisions in Aquino's proposed executive order that was leaked to the press in February was a fresh five-percent "royalty tax" on the market value of the minerals produced.

But Peter Wallace, an advisor for foreign investors, said at a nationally televised forum on mining this month that the Philippines already had some of the highest taxes on mining in the Asia Pacific.

Wallace and other mining advocates argue there are many taxes on the industry and other business costs the government does not take into account when making it case for more revenues.

"If we make it higher, we won't get the investments. We won't get the mines. Maybe that is the idea," he said.

The leaked executive order also called for much stricter environmental requirements, with agricultural land, ecotourism sites and other sensitive areas to be closed to mining.

But industry chiefs say the sector is already complying with stringent safety and environmental requirements.

They charge that the real environmental, social and economic problems in the industry rest with the hundreds of thousands of unregistered "small-scale miners" who collude with corrupt local officials.

The small-scale miners typically do not pay taxes and do little to safeguard the environment, often destroying mountainsides and sending dangerous chemicals such as mercury directly into waterways.

The Philippines is believed to have some of the biggest mineral reserves in the world, but they have been largely untapped due to poor infrastructure, security issues, a strong anti-mining movement and a range of other reasons.

The government estimates the country has about $840 billion in gold, copper, nickel, chromite, manganese, silver and iron, and this figure could go higher once further exploration is carried out, mining bureau chief Leo Jasareno said.

Yet only 31 major mining companies are operating in the country, focused mostly on nickel, gold and copper.

"We have barely scratched the surface of our country's mineral wealth," Jasareno told AFP.

Chamber of Mines president Philip Romualdez said last week that industry feared the government's reform plans had given ammunition to the already very strong anti-mining lobby, which includes the powerful Roman Catholic church.

"They are riding on the issue. Cesar Purisima is playing into their hands," Romualdez said.

However anti-mining groups are concerned that industry's intense lobbying campaign, which has seen a barrage of press conferences and full-page advertisements in newspapers, may lead to a weakening of the planned reforms.

"The president is beginning to feel the pressure of the mining industry," said Jaybee Garganera, national coordinator of the Alliance to Stop Mining.

Purisima and other government officials have not indicated what changes there will be from the leaked executive order, if any, nor said when Aquino would endorse a new one.

However Purisima has insisted the reforms will bring more certainty to the industry, which will in the end attract more investors.

"Our effort is to make sure that we define this (mining policy) better, we implement this better, and that we clarify various rules that were vague and were conflicting," he said.

"Then, after this process, I believe, that the regulatory environment will be better for mining investors."

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Philippine, Vietnamese troops play soccer and sing on disputed island

    By Manuel Mogato MANILA (Reuters) - Vietnamese and Philippine troops played soccer and sang karaoke on a South China Sea island on Wednesday in a sign of the growing security ties between the two Southeast Asian nations most at odds with Beijing over the contested waterway. Cooperation has blossomed between Hanoi and Manila since they shelved decades of enmity over their competing claims in the Spratly archipelago to try to counter China, whose creation of artificial islands in the region …

  • SE Asia Stocks - Fall on renewed U.S. rate hike concerns

    BANGKOK, May 27 (Reuters) - Southeast Asian stock markets tumbled on Wednesday as investors resumed selling on expectations of an interest rate hike in the U.S. sooner rather than later, derailing Philippine ... …

  • Phl, US defense chiefs to meet on sea dispute
    Phl, US defense chiefs to meet on sea dispute

    As US aircraft carrier USS Ronald Regan began its journey to Asian waters amid China’s power flexing in the region, Defense Secretary Voltaire Gazmin would try to hear directly from his US counterpart how far America is willing to go to aid its long-time ally against China’s threatening moves in disputed waters. Gazmin flew to Hawaii last Monday to attend ceremonies for the turnover of leadership of the United States Pacific Command (USPACOM) from Admiral Samuel Locklear to Admiral Harry …

  • Water in Angat Dam falls below critical level
    Water in Angat Dam falls below critical level

    The water level of Angat Dam in Bulacan yesterday fell below the 180-meter critical level for irrigation, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) said. PAGASA said the dam’s water level further dropped to 179.98 meters as of 6 a.m. yesterday from 180.2 meters on Monday. The priority is the domestic consumption in Metro Manila, according to PAGASA. …

  • PCSO gets P3-B fund for medical aid
    PCSO gets P3-B fund for medical aid

    The Philippine Charity Sweepstakes Office (PCSO) reported yesterday that an estimated P3-billion charity fund has been allocated by Congress to the agency to provide medical assistance to indigent patients and also give funds to other government offices including the Philippine Drug Enforcement Agency (PDEA) and the Crop Insurance Program. …

  • Image of Asia: Tearing down squatters' homes near Manila
    Image of Asia: Tearing down squatters' homes near Manila

    In this photo by Bullit Marquez, a demolition crew begins to tear down a squatters' community at suburban Caloocan city, north of Manila, Philippines. Population growth and the lack of economic opportunities in rural areas have driven millions of Filipinos into the squatters' colonies that dot the sprawling metropolitan area in and around Manila. Most of the land they occupy is privately owned, and clearing the dwellings often results in violence. The landowner had offered about $1,344 in …

  • SE Asia Stocks - Mostly down; Thai shares near 2-week low

    BANGKOK, May 26 (Reuters) - Most sharemarkets in Southeast Asia fell on Tuesday with the Thai index ending at a near two-week low and the Philippines touching a near four-week low after trade data while ... …

  • China breaks ground on lighthouse project in South China Sea

    China hosted a groundbreaking ceremony for the building of two lighthouses in the disputed South China Sea, state media said on Tuesday, a move that is likely to escalate tensions in a region already jittery about Beijing's maritime ambitions. China's Ministry of Transport hosted the ceremony for the construction of two multi-functional lighthouses on Huayang Reef and Chigua Reef on the disputed Spratly islands, state news agency Xinhua said, defying calls from the United States and the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options