Tuesday, June 26, 2007
Environment and Natural Resources Secretary Angelo T. Reyes issued yesterday a new set of fiscal guideliness to ensure equitable sharing among various stakeholders in mining and make the Philippine minerals industry more competitive.
The new rules provide for a simplified benefit-sharing scheme where the government and the mining contractor got an equal share from the net mining revenues after the latter has recovered its capital investment.
Under the previous rules, there were three options available to projects covered by financial or technical assistance agreements (FTAA). They are cumulative net cash flow option, additional profits option and net mining revenue option.
Reyes said the DENR believes that the net mining revenue option will result in a “more equitable sharing of benefits, where the contractor gets a reasonable return of its investments while the government gets its reasonable share from the utilization of the country’s mineral resources.”
Reyes said this is in harmony with the majority and minority opinions raised in the Supreme Court decision regarding the benefit sharing scheme for FTAA projects.
Other reforms to be implemented under the new fiscal regime: the requirement for the FTAA contractor to pay only the excise tax, royalties to indigenous peoples, if applicable, and local taxes during the recovery period; allowing a recovery period longer than five years for projects with very large investments, high production and extensive mine life; and allowing the contractor to avail of the incentives under the Omnibus Investments Code provided there are sufficient ore reserves and mine life.
Reyes said the issuance of new rules governing FTAAs is only one of major reforms under the revitalization plan for the minerals industry.
He said the DENR is also working to simplify the procedures in the grant of mining permits.”
The DENR also intends to reduce the time for posting mining applications, and streamlining requirements for the National Commission on Indigenous Peoples (NCIP) clearance and endorsements from local government units.
Reyes added that the DENR is “revisiting the 24 priority mining projects to include new projects that have potentials of contributing to the goals of the program.”
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