MGB collects 32% higher royalties from mine sites

MANILA, Philippines - The Mines and Geosciences Bureau (MGB) yesterday reported a 32 percent increase in royalties collected from mines operating in mineral reservation areas in the first half of the year.

The government collected P763.66 million in royalties from January to June, up from P577.55 million in the first half of 2014.

Last year, the actual royalty earnings from mines operating in mineral reservation sites reached P2.69 billion.

Bureau director Leo Jasareno said collection rose year-on-year as two mines joined the production stream.

According to MGB, the collection represents five percent of the market value of the gross output of the minerals produced during the period.

Under Section 5 of the Philippine Mining Act of 1995, 10 percent of the amount collected shall accrue to the MGB for special projects and other administrative expenses related to the exploration and development of other mineral reservations.

The 90 percent shall be divided between the national government (60 percent) and the local government (40 percent) where the minerals are located.

Government-declared mineral reservation areas are located in Zambales in Region III, and Surigao del Norte, Surigao del Sur and Dinagat Islands in Region XIII.

For the first half, the share of local government units amounted to P274.92 million.

Joint Circular  2010-1 between the Department of Environment and Natural Resources, Department of Finance, Department of Budget and Management, Department of Interior and Local Government provides the guidelines on the release of share of local government units from royalty payments.

The five percent royalty payments collected from firms operating in mineral reservation areas are collected on top of other taxes levied on the extractive industry such as corporate income tax, two percent excise tax, business tax, and royalty payments for indigenous peoples directly affected by mining operations.