Aquino’s priority: sin tax not mining law

MANILA, Philippines – The president has spoken. As far as extracting revenues from controversial industries through legislation, sin tax gets the “urgent” stamp, but mining will not.

In an interview on ANC on Wednesday, July 18, President Aquino doused cold water on the hopes of the mining industry players that the government’s policy will be clearer and longer-lasting after the Palace recently released an executive order stopping the issuance of new mining contracts indefinitely.  

“It (mining reform bill) can wait a little while because there are the two that are more important than this one, at this point in time,” he said in the interview.  

The more “important” ones are the legislative reforms on the sin tax and anti-money laundering laws, both already pending before Congress, which will be holding its third session this month before adjourning for the 2013 elections.

Both the sin tax and mining industry reforms will increase revenues for the state, but Aquino noted that “the sin tax measure is in a mature form already.”

The sin tax bill has made it through the first hurdle — the House of Representatives — in June. If the bill is passed, tax collections from sin products (cigarettes and alcohol) can increase national revenues by around P30 billion a year. 

Aquino has certified the sin tax reform bill as urgent, while mining industry players are still waiting for him to do the same for the mining reform moves. 

Mining revenues

Increasing revenues from the extractive mining industry — through a hike in excise taxes to a 5% to 7% range from the current 2%, plus including a 5% royalty — has also been a frequent call of Aquino, but he doesn’t mind retaining the status quo for another year or two.

“There are so many priorities. They really have to make a firm priority. So the mining (amendment), I think can wait a little while,” he said.

Extending the waiting period means the moratorium on new mining contracts also stays.  

“Are we getting the benefits that we should be getting from it? So if we hasten to continue that which was not beneficial to our people, I don’t see the logic in that. Better to put a hold in it, preserve the resources and get the maximum benefit for it for our people,” he said.

Studying what will be the “maximum benefit” from mining was a reason he gave for the delay in the issuance of Executive Order 79, which was released on July 9.  

“One of the things we had to vet was exactly what does [the mining industry contribute]. You know, when the mining industry says ‘we contribute x amount to the economy,’ I have to check, exactly what did they contribute. From our figures — about a 140 billion — we get around less than 10% in terms of the duties. [But] we get 100% of the problem and 10% of the revenues accruing from it. And of course it’s extractive, once its gone, it’s gone,” he explained.

He also explained that the lobby from both anti- and pro-mining groups are the “noisiest” he has encountered so far.

“I wouldn’t say it was one of the toughest, but you had one of the noisiest lobbies from both sides of the equation… I try to listen to everybody and come to a consensus that everybody can live with even if they’re not happy with it.”

Tourism, not mining

The EO79 expanded the “no-go” mining areas to include 78 tourism spots, farms, marine sanctuaries and island ecosystems.

Using the same mineral-rich areas for tourism purposes has been the battlecry of several environmentalists and anti-mining groups.

“Well, I think there’s no question, if there’s a choice between the two (mining and eco-tourism). Ecotourism continues on and on and on, while you preserve the sites. Mining, once the minerals are gone, that’s it. What happens if…they don’t adhere to the provisions that protect the environment, is a damaged environment that will take years and years to rebuild.

Anti-mining groups are also pushing the Alternative Mining Act, which mining industry players have said will “kill” them. – Rappler.com

For the existing mining contracts in the Philippines, view this #WhyMining map.

How does mining affect you? Are you pro or against mining? Engage, discuss & take a stand! Visit Rappler’s #WhyMining microsite for the latest stories on issues affecting the mining sector. Join the conversation by emailing whymining@rappler.com your views on the issue.

For other views on mining, read:

More on #WhyMining:

• Shaping the future of mining
• EO: No new mining contracts
• The Mining EO: A mixed bag
• Mining E.O. not perfect, but very good
• CONVERSATIONS: What are your thoughts on the mining EO? #WhyMining
• Mining E.O. pits gov’t vs local execs
• Correcting lies and disinformation
• Stand for the environment
• How can mining work for Philippines?
• Mining is a social justice issue
• REPLAY: #WHYMINING