DENR open to alternate revenue-sharing scheme

MANILA, Philippines - The government, which is looking to increase its share in mining revenues is open to any revenue-sharing scheme that will allow it to collect at least P16 billion from such operations per year, a cabinet official said.

Environment Secretary Ramon Paje told reporters late Tuesday that while he is pushing for the declaration of mining areas as mineral reservations to increase the government’s share in mining revenues, he is open to any scheme that would allow the government to collect more from mining operations.

“I am willing to accept any substitute [revenue-sharing scheme] so long as it can equal the revenue that it (the proposed declaration of mining areas as mineral reservations) can generate, which is P16 billion per year,” he said.

The declaration of all areas being mined as mineral reservations would require mining firms to remit a five percent royalty atop the two percent excise tax collected from the gross sales of production from the site.

Chamber of Mines of the Philippines (COMP) vice president for communications Rocky Dimaculangan said last week that the group has yet to finish its consultations with its members to come up with a revenue-sharing scheme to be proposed to government.

Earlier, the COMP said they oppose the proposed declaration of all mining areas as mineral reservations citing that it would hurt the industry and that they were already giving their fair share of taxes.

The COMP claims that they have been paying an average of P10 billion worth of taxes per year since 2007.

The COMP said that in 2010, the industry’s total payments in terms of taxes, royalties and fees amounted to nearly P14 billion.

The COMP also said earlier that mining firms are open to a 50-50 profit-sharing scheme with the national government citing that it was a more equitable arrangement given that metal prices are unpredictable.

Paje said that if the 50-50 revenue-sharing scheme would allow the government to get P16 billion or even more revenues per year, the state would be willing to support it.

He said that under a 50-50 revenue-sharing scheme though, the government may not get higher share in revenues since all the taxes that the mining company would need to pay would already be part of the government’s 50-percent share.

He said that while the government wants to push for the declaration of mining areas as mineral reservations, consultations would have to be conducted to come up with a scheme that the industry would be willing to support.

Consultations with mining companies, he said, are scheduled today (Thursday), while consultations with civil society groups will be held tomorrow (Friday) to discuss the push for higher government share in mining revenues as well as other items to be pushed for the regulation of the industry.

He said the government would first release a policy statement which would set the limits of the policies to regulate the mining industry.

He added that a series of policies which would contain the details for the regulation of the industry such as the revenue-sharing scheme, environmental standards, among others, will be released thereafter.