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MANILA, Philippines - President Benigno Aquino III will ask Congress to pass a new legislation that will increase the government's revenue share for all new mining operations, and cover existing mining operations as well.
Executive Order No. 79, signed by the President on July 6, imposes a moratorium on all new mineral agreements until the new legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect.
Since the EO cannot be implemented retroactively to cover more than 300 existing mining operations, Environment Secretary Ramon Paje said the government hopes the new legislation would do the job.
Paje said the government is looking at a range of 5 to 7 percent for royalties based on gross revenues.
"We are seriously considering to recommend that the President certify this as urgent," Paje said in a briefing on Monday, referring to the future legislation on revenue sharing.
Paje said the government also wants higher excise tax which is currently at 2 percent.
He said the Mining Industry Coordinating Council (MICC) created by EO 79 would recommend to Congress the final range based on "best international practices."
The MICC will be composed of the climate change adaptation and economic clusters of Cabinet as well as the Justice Secretary, National Commission on Indigenous Peoples chairperson, and the Union of Local Authorities of the Philippines president.
While the EO was silent on the revenue sharing scheme, it imposes 5-percent royalty on new extractions done in areas declared as Mineral Reservations.
While existing contracts will be respected, Paje said he hopes the new legislation would address this.
Paje said if the 5-percent royalty is implemented retroactively on existing mining operations through legislation, this will generate revenues of as much as P16 billion for the government.
Paje said the granting of mining rights and tenements shall be undertaken through competitive public bidding, as opposed to the “first come, first serve policy” in the past.
Under EO 79, all valuable metals in abandoned ores and mine wastes or mill tailings generate by previous and now defunct mining operations belong to the state and shall be developed and utilized through competitive public bidding.
Paje said this would result in revenues of up to P50 billion.
EO 79 also limits all small-scale mining operations to within Minahang Bayan areas.
The order completely banned the use of mercury in all small-scale mining operations, which shall also not be applicable for metallic minerals except for gold, silver, and chromite.
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