PH looking at Chile model for mining revenue-sharing

Finance chief Cesar V. Purisima

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MANILA - The Aquino administration is looking at an "escalation and de-escalation" clause that will provide the government flexibility in getting its fair share of mining industry revenues, Finance Secretary Cesar V. Purisima said on Monday.

On the sidelines of the Philippine Economic Briefing, Purisima told reporters that the government is considering the mining structure of Chile, which provides for adjustments whenever there is movement in the prices of minerals.

"We had a bilateral talk with the government of Chile during the recently concluded APEC Summit in Russia. We are looking at the profit-sharing model they established with the private sector," Purisima said.

"Chile's model is quite interesting and could be used here in the Philippines. They have this provision that would increase the share in revenues of their sovereign each time mineral prices go up, and will also be adjusted when the prices go down," he added.

Chile is one of the world's top five mining project destinations, along with Australia, Canada, Brazil and Mexico.

Besides Chile, the government is also considering Australia's best practices in the areas of carbon tax, mineral reservation and equitable revenue mining scheme.

In the next two weeks, the Mining Industry Coordinating Council will complete its study on the possible reforms that will be incorporate in legislation.

"We are looking at completing the study within the next two weeks, and thereafter come up with draft legislation and propose the same to Congress," Purisima said.

Executive Order No. 79 created MICC to introduce reforms in the Philippine mining industry. The committee is composed of heads of the climate change and economic clusters, the Department of Justice, the National Commission on Indigenous Peoples and the Union of Local Authorities of the Philippines.

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