Clarity on the mining finance system for the benefit of the metal processing sector
By Justine Irish D. Tabile, A reporter
CLARITY on the provisions of the mining finance regime is expected to attract more investors in mineral processing, said the Chamber of Mines of the Philippines (CoMP).
Within 13th Arangkada Philippines Forum, CoMP Chairman Michael T. Toledo said investors have cited unstable regulation and an uncertain financial regime as the reason for their reluctance to invest in the Philippines.
“The first thing they always say is, ‘The problem with mining is that your laws are always changing and your financial method is not very clear and there seems to be no transparency or implementation of policies’… they have been hesitant,” said Mr. Toledo.
However, he said this will be fixed once the government signs the proposed mining finance law.
In the same event, Senate President Francis G. Escudero said that Congress hopes to pass this measure in the remaining 41 days of the session until June 30, 2025.
“This was passed in the Lower House months ago, so it is still pending in the Senate. And we hope that it will be passed, and it will be the first time that we have a mining finance management bill that will really govern the industry,” said Mr. Toledo.
“With a law that clearly defines and regulates the rights of all those in the industry, the government, mining operators, and other government institutions related to other stakeholders, it will attract more investment,” he added.
He said the passage of this bill will help ensure transparency and predictability, which will allow investors to make long-term plans.
The House of Representatives approved its version of the measure in September last year, while the bill is awaiting second reading in the Senate.
Senate Bill No. 2826 seeks to establish a five-tiered royalty rate range of 1-5% and a five-tiered income tax range of 1-10%.
Meanwhile, House Bill No. 8937 aims to charge large miners 4% of their gross output and establish a margin-based royalty range of 1.5-5% with eight tiers and a profit tax of 1–10% with 10 tiers. .
According to Mr. Toledo, the Senate version of the bill includes input from CoMP, the Department of Finance, the Anti-Red Tape Authority, the Department of Trade and Industry, and other stakeholders.
“The hearing of the technical working group was very full … because we really want this bill to be passed because if not, it may be difficult to get another mining bill,” he said.
“This is all that foreign businessmen expect before they invest billions of dollars here to help the industry … Mining can do many things as long as they are responsible and sustainable,” he added.
Apart from insisting that the mining finance regime be passed, Mr. Toledo said that the industry also wants local laws so that they do not conflict with laws passed by Congress.
“Why do we allow a local law issued by the local government, for example, to close mines or to close a certain mining method, such as open pit mining, when there is a law that says it is allowed? Isn’t that breaking the law?” he said.
“If you are a local government official, you have to implement the laws passed by Congress, which is tasked under the Constitution to pass laws and make laws, and the Supreme Court and the courts to interpret the law,” he added. .
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