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UK extends assistance for Philippine compliance to global mining standard means BUSINESS

MANILA – The British government has provided a grant that would help the Philippines comply with the Extractive Industries Transparency Initiative (EITI).

In an interview, Clarisse Fogg, program manager of the British Embassy Manila’s Bilateral Program Fund, said her government will provide 100,000 pounds or P7.4 million for the second year of the assistance.

EITI is an international standard for transparent management of revenues from natural resources voluntarily implemented by a global coalition of governments, industry players and civil society organizations.

“We’re quite confident that Philippines will be EITI compliant,” Fogg said.

Bantay Kita, the civil society representative in PH-EITI multi-stakeholder group (MSG), on Monday signed a memorandum of understanding with the British Embassy Manila for the continuation of the assistance.

“The choice facing the country is not how to stop mining and energy extraction but to stop those   who act outside  the law and care a little for the impact on communities,” British Ambassador Asif Ahmad said.

Ahmad said the British Embassy is supporting the Aquino administration’s efforts to manage its resources through EITI  to curb corruption and conflict and encourage more equitable growth.

More companies are participating in the EITI, with 25 mining and oil exploration firms having submitted waivers to the government, allowing it to disclose their tax payments and credits.

About 21 out of the 50 big mining firms in the country will participate in the EITI. Another four in the oil exploration business will also take part in the initiative.

The Philippines is vying for EITI compliance, which requires participating companies to fully disclose data on taxes and other payments made to, or tax and other perks derived from the government, which in turn will publicly disclose such information.

President Benigno Aquino III earlier signed Executive Order No. 147 creating Philippine–EITI, which also established the PH-EITI Multisectoral Group and the PH-EITI secretariat under the Department of Finance (DOF).

Under the EITI, participating companies will have to submit data to the government no later than December.

Seventeen waivers came from mining companies that are members of the Chamber of Mines of the Philippines (COMP), as follows: 

  • Benguet Corp/Benguet Nickel Mines Inc
  • Cagdianao Mining Corp
  • Hinatuan Mining Corp
  • Rio Tuba Nickel Mining Corp
  • Taganito Mining Corp
  • Carmen Copper Corp
  • Filminera Resources Corp
  • Lepanto Consolidated Mining Co
  • OceanaGold (Philippines) Inc
  • Philex Mining Corp
  • Philsaga Mining Corp
  • Platinum Group Metals Corp
  • TVI Resource Development         
  • Zambales Diversified Metals Corp
  • CTP Construction and Mining Corp
  • Berong Nickel Corp
  • Eramen Minerals Inc

Four waivers were submitted by non-members of COMP, as follows:

  • Leyte Iron Sand Mining Corp
  • Sino Steel Phils. H.Y. Mining Corp
  • Cambayas Mining Corp
  • Marcventures Mining and Development

Shell Philippines Exploration BV, Chevron Malampaya, PNOC-Exploration Corp and Nido Production Galoc Pty. Ltd. have also submitted waivers to the Bureau of Internal Revenue (BIR). 

There are 35 countries implementing EITI, including Norway where mining firms remitted the highest payment to the government at $65.2 billion in 2012, followed by Azerbaijan with $21.8 billion.

In the Philippines, the mining industry's contribution to excise tax collection stands at three percent of total excise taxes raised, thus pales in comparison to that chipped in by the tobacco, liquor and petroleum industries at 45.5 percent, 33 percent and 14 percent, respectively.

While mineral output is increasing, the industry's contribution to gross domestic product (GDP) stands at one percent, according to government data.

The country has 38 operational large-scale metallic mines scattered across 13 provinces. Surigao del Norte alone has seven, followed by Dinagat Islands with five, and Surigao del Sur and Zambales with four each.

These operating mines contribute a combined 0.7 percent of the country's total employment. Despite the presence of these mines, poverty incidence is highest in most of these areas, except for Zambales and Benguet.