Bangsamoro gets 75% of taxes, resources

Angela Casauay

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The wealth-sharing deal between gov't and MILF provides for 75-25 sharing in favor of Bangsamoro of taxes, and profits from natural resources

SIGNED. The government and the MILF agree on wealth-sharing. Photo from OPAPP

MANILA, Philippines (Updated) – How will wealth be shared between the envisioned Bangsamoro political entity and the government?

Under the wealth-sharing annex signed by the Moro Islamic Liberation Front (MILF) and the government shortly past midnight on Sunday, July 14, revenues from the following sources will be divided between the Bangsamoro regional government and the national government using the following ratios:

  • 75-25 in favor of the Bangsamoro for taxes and charges “other than tariff and custom duties” collected within its jurisdiction
  • 75-25 in favor of the Bangsamoro for profits from metallic minerals
  • 100% of revenues form non-metallic minerals (sand, gravel and quarry resources) will go to Bangsamoro
  • “Equal share” between the Bangsamoro government and the central government for income from energy sources, such as petroleum, natural gas and uranium

How did they come up with these ratios?

As far as the “equal sharing” on energy sources, such as oil or gas is concerned, government peace panel chair Miriam Coronel Ferrer said: “The principle there is for the Bangsamoro to benefit from these resources but at the same time, to be able to provide their contribution to the country.” 

Both sides arrived at an agreement at about 10:30 pm Saturday, after holding a meeting for 12 hours and extending the talks to two days. 

READ: GPH-MILF agree on wealth-sharing

READ: Still no deal: peace talks extended anew

READ: MILF returns to negotiating table

Unique provision

To allow the Bangsamoro government to achieve its goal toward fiscal autonomy, Ferrer said both parties included a “unique provision” indicating the aspiration of the Bangsamoro to be less and less dependent on the national government. 

“There’s a very good provision that says what the Bangsamoro will get from natural resources, as well as national taxes, will be deducted from their annual appropriations,” Ferrer said. “So, there is more incentive for them to be able to get more resources, as well as in giving them more control over shares of natural resources that will be found inside their jurisdiction.” 

Ferrer said the wealth-sharing arrangements agreed on by both parties are designed to ensure that the Bangsamoro will have a certain amount of fiscal capability that would enable them not to depend merely on government allocations. 

Fiscal autonomy

Signed Annex on Revenue Generation and Wealth Sharing

In negotiating for wealth-sharing arrangements, the MILF has stressed that what should be granted to the Bangsamoro must be greater than what the ARMM presently enjoys, arguing that they do not want to be just like any other local government unit that is dependent on their internal revenue allotment. 

The Autonomous Region in Muslim Mindanao (ARMM), which will be replaced by the proposed Bangsamoro political entity, has a 50-50 wealth-sharing arrangement with the government for natural resources. In other local government units, profits are split 60-40, in favor of the government. 

Ferrer admitted they considered the possible repercussions of the new ratios to other LGUs.

“The rationale for this is it’s not only for one LGU,” Ferrer said. “It’s for several LGUs which are going to be part of the Bangsamoro. The profits will be shared within the various LGUs.” 

The government will release the official copy of the annex on Monday, July 15.

In February, both sides “initialed” a draft version of the annex. But the government requested to defer the signing of the annex twice – in March and April, citing the need to conduct due dilligence. 

Sources told Rappler the government initially wanted a 50-50 arrangement on natural resources. The MILF, however, wanted to stick with the initial document, which indicated a 75-25 sharing ratio. 

FINALLY. Office of the Presidential Adviser on the Peace Process Secretary Teresita Deles confers with MILF chief negotiator Mohagher Iqbal after the two panels come to an agreement on wealth sharing. Photo from OPAPP

Moving forward

With the signing of the annex, the parties moved one step forward to signing the final peace pact. 

Both sides still need to finish two annexes – on power-sharing and normalization. The first annex – on transitional arrangements and modalities – was signed in February. 

As in any negotiation, Ferrer said she still expects a lot of “pushing and pulling” to happen in the next few rounds. 

Both sides are expected to complete the power-sharing annex next since work on the annex has started June last year, at the same time as the wealth-sharing annex. 

Meanwhile, the normalization annex is still under the level of the technical working groups. In the recent talks, both sides tackled the phasing and timing of the decommissioning of MILF combatants and other armed groups, as well as the composition of the Independent Commission on Policing – the body tasked to submit recommendations on the police force for the Bangsamoro.  

The parties will meet again after Ramadhan. –

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