Philippines: MICC defers recommendation on lifting MPSA moratorium

MANILA, Philippines — The inter-agency Mining Industry Coordinating Council (MICC) has decided to defer its recommendation involving a moratorium imposed on new mineral agreements pending the passage of a bill which seeks to overhaul the mining industry’s fiscal regime, according to the Department of Finance (DOF).

During a meeting last week, Finance Secretary Carlos Dominguez and Environment Secretary Roy Cimatu, co-chairpersons of the MICC, discussed the moratorium on new mineral production sharing agreements (MPSA), and the implications of the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

The Department of Environment and Natural Resources (DENR) asked whether the increase in excise tax on mineral products under TRAIN would be enough to satisfy the condition for the lifting of the moratorium, as provided under Executive Order 79.

The EO provides that a moratorium on new mineral agreements should be implemented until a legislation rationalizing existing revenue sharing schemes and mechanisms have taken effect.

However, the DOF clarified that TRAIN only increased the excise taxes on mineral products, and did not fully incorporate a new fiscal regime for mining.

The DOF said reforms on the mining fiscal regime, including royalty, windfall and profit taxes, incentives, and revenue-sharing schemes, are instead covered under Package 2 Plus of the Comprehensive Tax Reform Program, as contained in House Bill 8400.

As such, the MICC resolved to defer its recommendation to lift the moratorium on MPSAs until the package is passed into law.

House Bill 8400 has already been approved by the House of Representatives on third and final reading. The bill was transmitted to the Senate last Nov. 13.

During the same meeting, the MICC also agreed to commence next year its review on the remaining 15 mining companies which were part of the 41 mines initially reviewed by the DENR under former Secretary Regina Lopez in 2016.

MICC is eyeing to commission the same team of experts which conducted the first round of review on the 26 mining companies ordered suspended and closed by the former DENR leadership.

Dominguez described their outputs as “highly commendable.”

Meanwhile, the DENR was also tasked to study the process of delineating the go and no-go zones for mining application identified under EO 79.