(The Philippine Star) | Updated November 29, 2016 - 12:00am
MANILA, Philippines -
Failure by the last Congress to enact a new revenue sharing and taxation scheme
for the mining industry presents an opportunity for determining new tax rates,
Socioeconomic Planning Secretary Ernesto Pernia said yesterday.
In an address delivered
at the Dissemination Forum on the Mineral Asset Accounts of the Philippines,
Pernia said the completion by the Philippine Statistics Authority (PSA) of the
new physical and monetary asset accounts for major Philippine mineral exports
gold, copper, nickel and chromite would help the government assess the current
policies in the mining sector.
“One critical use of
the mineral accounts is in the analysis for an appropriate fiscal regime.
However, the bill on fiscal regime and revenue sharing agreement was not
enacted in the 16th Congress,” he said. “Thus, this is a great opportunity to
revisit and put forward new calculations for an appropriate tax rate that will
be levied on mining companies.”
The newly-completed
mineral accounts, said Pernia, would guide the country’s economic planners in
determining growth and development strategies for the mining sector.
“The results of the
mineral accounts project could not have come at a better time, as we are now in
the process of formulating our Philippine Development Plan 2017-2022. The
mineral accounts will guide us in the identification of the strategies in the
mining sector,” he said.
The Duterte
administration, he said, wants to strike a balance between having a responsible
mining environment and enhancing the contribution of the extractive industry to
the country’s economic output.
“If properly utilized, these (mineral
accounts) will be useful in formulating policy recommendations on how to
operationalize responsible mining in the country,” he said.
Citing data from the
Mines and Geosciences Bureau (MGB), Pernia said the mining sector currently has
a 0.7 percent contribution to the country’s gross domestic product (GDP) and
comprises 5.6 percent of the total exports.
From 2011 to 2015, the
sector was also a robust provider of employment, creating an average of 236,400
jobs annually during the reference period.
“Considering its small
contribution to the economy and the contentious debate on mining and its links
with issues on land-use, environment and social acceptability, the question for
us is: How can we harness the full potential of the country’s mineral resources
to contribute to economic growth, generate employment, and reduce poverty,”
said Pernia.
The local mining
industry has always faced various challenges among which are proliferation of
illegal small-scale mining activities, limited number of processing plants to
add value to mineral products, and lack of an efficient revenue collection that
would ensure an equitable and of income from mining to the proper
beneficiaries.
The past four years,
however, have been especially difficult for the industry striving to attain its
full potential. In 2012, the Aquino administration imposed a moratorium on the
approval of new mining contracts pending the passage into law of a new revenue
sharing scheme between the government and mining companies.
Higher taxes sought by
the previous administration are viewed by the industry with trepidation as this
is seen to make the industry uncompetitive, driving operational mines out of
business and preventing the opening of new projects.
The transfer of power
to the Duterte administration dealt another blow to the industry after the
Department of Environment and Natural Resources (DENR), under new secretary
Gina Lopez, launched an audit of the operations of 40 metallic mines,
suspending 10 companies in the process.
In between cracking
down on illicit operations, the government over the past four years also
introduced several reforms that would help the industry survive the tumult.
These include legitimizing the operations of qualified small scale miners by
lumping them together in so-called Minahang Bayan sites which operate under strict
environmental controls as well as allowing existing projects to expand
operating areas to enable existing companies to survive.
Pernia supports the
ongoing audit conducted by the DENR and said further reforms in existing
policies are needed to enable the sector to become an effective contributor to
the economy.
“We laud the
Department of Environment and Natural Resources’ (DENR) efforts towards truly
responsible mining in the country through its ongoing mining audits,” he said.
“We in NEDA believe that it is necessary to implement further policy reforms to
enable the mining sector (to) realize its full potential and increase its role
in nation building.”
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