EO on mining to honor existing contracts

MANILA, Philippines – The government’s new mining policies would honor existing contracts.

“The thrust of the changes are for new ventures that are going to be started,” Finance Secretary Cesar Purisima said in a news briefing on Thursday, March 1. “I believe, at least from where we sit at the Department of Finance, existing operations and contracts will have to be honored and respected.”

He said that contrary to the fears of some business groups, the new mining policies would improve the investment climate in the sector.

“Since our effort is to make sure that we define this [rules] better, we implement this better, and that we clarify various rules that were vague and were conflicting, then after this process, I believe, that the regulatory environment will be better for mining investors,” he said.

Purisima said that under the Aquino administration, “people can trust that the rules of the game won’t be changed in midstream.”

In the past, the finance chief said, mining rules did not present “a true win-win situation” since “the government actually was not able to get its fair share from mining activities.”

Harnessing wealth

In 2012, total collections from the mining industry amounted to just a little over P2 billion, but total revenues reached P1.2 trillion, according to Purisima.

“So when you look  at that and, at the same time, the impact to the communities that host it and the environment adjacent to it, you really have to ask yourself whether the way we’re implementing it is what we describe as a responsible way of harnessing the wealth of the country,” he said.

Thus, the government is looking at various models “so that this can be done so that all the interests of the different sectors are addressed.”

He added that mineral-rich Australia has also reviewed its mining policy, and had imposed not just a carbon tax but also a mineral resource rent tax “in the belief that this mineral resources should benefit the country.”

“We’re watching this from afar. We’re also looking for developments from other leading mining localities and we’ll consider all of these in crafting the EO,” Purisima said.

The finance chief said that the government wants “to attract the real mining operators who are going to put to bed their capital, their management expertise and their technology in developing the mineral resources of the country.”

Malacañang was to supposed to issue the EO by the end of February, but deferred its issuance, pending more consultations with the stakeholders. – Rappler.com

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