DENR shelves recommendation to lift ban on new mining projects
The Department of Environment and Natural Resources (DENR), the government agency tasked to regulate the mining industry through Mines and Geosciences Bureau (MGB), said it is now up to the Department of Finance (DOF) what ideal tax structure to slap against mining companies as well as to push for the lifting of ban on new mining projects.
This, after the Mining Industry Coordinating Council (MICC) deferred the recommendation to lift Executive Order (EO) 79, which placed a moratorium on the issuance of new mineral agreements
Under EO 79, no new mineral agreements should be approved “until a legislation rationalizing existing revenue sharing schemes and mechanisms shall have taken effect”.
When the excise tax hike on mineral products from 2 percent to 4 percent under The Tax Reform for Acceleration and Inclusion (TRAIN) Law was implemented, the DENR argued that it should already be considered as a new tax regime.
But the DOF clarified that TRAIN only increased the excise taxes and did not cover the implementation of a new fiscal regime for mining.
The new fiscal regime being proposed now by the DOF covers other taxes and fees, such as royalty, windfall, profit, and incentives.
In November, the House of Representatives already passed on third and final reading House Bill (HB 8400), which seeks to “rationalize and institute a single fiscal regime applicable to all mineral agreements.”
In the upper chamber, however, it is still uncertain when the DOF proposal on new mining fiscal regime, which was filed as Senate Bill (SB) 1979 by Senate President Vicente C. Sotto III, will be taken up.
When asked if the DENR will submit
It’s four days before Christmas and 10 days before we bid 2018 goodbye. Many are frantic doing last-minute shopping, wrapping up gifts for friends and families, on the business front, while not much domestic activities are expected with most investors staying on the sidelines, the decision of the US Federal Reserve Wednesday to hike interest rates by 25 basis points may alter certain outlook moving forward.
Looking back, 2018 was a challenging year with inflation as the main concern, causing jitters in the political arena from President Duterte to the halls of Congress because of the howls coming from us, the ordinary individuals.
The acronym that comes to fore due to the uptick in the prices of goods and basic commodities is “DORY.”
To the tune of the Christmas Alphabet, everybody sing: D is for dollar that battered the peso to a nine-year low. O is for the oil price, which went haywire in the domestic market due to the hike in excise tax, courtesy of the chu-chu TRAIN that chugged down and ripped off our purchasing power early in the year.
R is for the (key interest) rate that the Bangko Sentral ng Pilipinas had to raise to quash the further depreciation of the local currency. And Y is the yearning of its comment and recommendation on how to improve the tax structure under SB 1979, Environment Undersecretary for Mining Concerns Analiza RebueltaTeh said the agency “will defer”.
“In terms of position [in the new fiscal regime on mining], it’s already up to the DOF,” Teh said.
Nevertheless, she said the DOF is consistent about consulting the DENR about the issue.
MGB previously recommended a per commodity tax increase in the mining sector but it was eventually dismissed.
Meanwhile, most of the suspension and closure orders issued by former Environment Regina Paz Lopez, which was just recently validated by Cimatu, already took effect, with only one company formally appealing to President Rodrigo Duterte.
In November, Cimatu decided to keep Lopez’s closure orders on Claver Mineral Development Corp., Oriental Synergy Mining Corp., Ore Asia Mining and Development Corp. the people for the authorities to address the situation. Y may also mean yields going up.
If we scramble the word DORY, what do we get? RODY. It’s the nickname of the President Duterte to his close friends and family.
And speaking of president, my tiger ears gathered from the halls of the business that Joseph Albert L. Gotuaco is leaving his post as executive vice president of Bank of the Philippine Islands and is moving to BDO Universal Bank this coming year. The talk is Mr. Joseph is being groomed to be the next in line to steer the country’s largest financial institution in terms of assets and resources. President in waiting?
Will this development mean that BDO President and Chief Executive Officer Nestor V. Tan may be retiring soon? In February this year, Mr. Nestor became a proud owner and a member of the community of government-issued cardholders, which provides 20 percent discount.
Before moving back to the Philippines, Mr. Joseph had a remarkable banking career offshore. This fixed income derivatives expert was a member of the Southeast Asia investment banking team of the J.P. Morgan & Co. and managing director and partner of IMprimis (Singapore) Pte. Ltd. He also worked for Credit Suisse First Boston, Merrill Lynch, and for management vehicle of the government of Brunei based in Singapore.
That’s career-wise. His education background is impressive as well. Mr. Joseph is a B.S. Economics, summa cum laude, in Finance and Marketing of Wharton School, University of Pennsylvania, and holds a M.B.A. from Harvard Business School.
Let’s see how will this sit out. In the meantime, enjoy the holidays. Happy Christmas.
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