Govt pushes ‘ease of doing business’ in mining

AS the Marcos administration steps up the revitalization of the mining sector to take advantage of the increasing global demand for energy transition metals, the government is looking at having mining drive green technology and high-quality job growth.

Secretary Maria Antonia Yuloloyzaga of the Department of Environment and Natural Resources (DENR) said the online processing of mining will be ready within the year, hoping to increase the number of operating mines in the next few years.

Speaking during a DENR-LED Mining Conference in Taguig City recently, Yulo-loyzaga said the full digitalization will be road-tested and is hopeful of shortening the waiting time for the approval of the mining permit applications.

“This is in the work-in-process stage,” said Yulo-loyzaga.

Frederick “Deck” Go, Secretary, Office of the Special Assistant to the President for Investment and Economic Affairs (Osapiea), said the objective of the interagency collaboration in the minerals development sector is to ensure the ease of doing business to encourage mining investment by shortening the waiting time for mining applications.

“We are working with Secretary Toni, particularly on the mining sector. I think the goal is very correctly mentioned. We have an ideal target of 1 to 2 years [processing permit],” he said.

“Apart from digitalization, the realization is perhaps [that] the process is going to be done simultaneously rather than sequential, to radically make the processing more swift,” according to him.

The forum, organized in collaboration with the Stratbase ADR Institute aimed to unite industry experts and other stakeholders to work closely with the government on policy reforms to ease regulatory obstacles and position the Philippines as a significant contributor to the global green economy.

He cited a mining reform bill in the Senate, and the idea is to equalize the taxation of the industry and essentially it will improve the taxation of foreign direct investment. He said the bill is still under deliberation.

The Chamber of Mines of the Philippines (COMP), he said, is very active in the taxation package being worked out by legislators.

He insisted that in luring investors, the Marcos administration, through the DENR and other concerned agencies, is working to improve the ease of doing business.

Interviewed by reporters, COMP Executive Director Ronald Recidoro said the members of the chamber are open to tax reform but said they prefer taxation based on profit, rather than gross income.

“We are happy to see that the DOF is beginning to see our point that we are already heavily taxed. If new taxes are imperative, they should be based on profit. All our taxes are gross-based. But the beauty of the current proposal as a windfall profit goes higher, the tax also goes higher,” he said.

In terms of the tax rate and tearing, there has been consensus in the industry. We will come up with a mechanism that is acceptable to the government and the industry.

According to Recidoro, the new tax, over and above the current real estate tax and other corporate tax, will increase the government’s share in mining revenue.

“One thing good about this is that an additional share of the government is as owner. A royalty is something you give to the owner. There is now a share of government as owner of the minerals,” he said, adding that it is “a recognition of the fact that the state is the owner of the minerals” and that the industry “will be doing the right thing.”

Addressing the same forum Friday, National Economic and Development Authority (Neda) Secretary Arsenio M. Balisacan highlighted the underutilized but immense potential of the mining sector.

Despite the sector’s modest contribution to the country’s gross domestic product (GDP), which stood at 0.5 percent by the end of 2023, he believes there is room for significant growth. Balisacan noted that only 0.17 percent of the country’s known mineral deposits have been developed for production.

Consequently, he said, employment in mining and quarrying remains low, constituting only 0.45 percent of total employment.

Presently, the majority of the country’s mineral exports are raw or unprocessed. This leads to foregone opportunities to leverage our natural resources to produce the tools and technologies that sustainable and resilient economies demand.

“With abundant reserves of minerals vital for producing green technologies such as solar PVS [photovoltaic cells], wind turbines, and electric vehicle batteries, the Philippines is strategically positioned to tap into global markets for these technologies and maximize the value derived from its mineral products,” Balisacan added.

Balisacan said that this can be achieved by further developing downstream metallic and nonmetallic mineral processing to bolster the expansion of domestic manufacturing industries focused on green technologies.

As outlined in the Philippine Development Plan (PDP) 2023-2028, the government is exploring opportunities to increase value addition in the mineral industry while ensuring macroeconomic stability and accelerating climate action.

However, Balisacan also acknowledged significant challenges impeding the growth of the mineral industry, such as limited availability of mineral processing technology, substantial capital requirements, high operating costs largely driven by high electricity expenses, and an unstable policy environment surrounding mining.

To address these challenges, Balisacan said the government will provide support to local industries for research and development (R&D) and commercialization of green technologies and products.

It will also implement reforms to bring down electricity and logistics costs and create an enabling policy environment to encourage private sector investments in green industries. He reiterated that the government is actively collaborating with relevant agencies to implement a suitable tax regime for extractive industries, particularly mining, and to institutionalize the Extractive Industries Transparency Initiative (EITI) principles.

“We expect the promising mining industry to support our manufacturing, infrastructure, and construction sectors, with spillovers to the broader economy through more and higher-quality jobs for all Filipinos even as we work toward our climate change commitments under the Paris Agreement,” the Neda chief said.