A PHILIPPINE senator on Thursday said a proposed export ban on raw ores would boost the country’s mineral processing capacity, responding to the Chamber of Mines of the Philippines’ concerns about potential mine closures and joblessness.
Senator Joseph Victor “JV” G. Ejercito told a news briefing the ban under a Senate-approved priority bill that seeks to rationalize the mining fiscal regime would lead to the construction of more mineral processing plants in the country.
“The rationale is for the mining firms to establish their processing plants because we want the finished product instead of just putting out raw materials for export,” he said in mixed English and Filipino.
“And if they process these (minerals) here, that will result in more employment and additional revenue. We patterned this after the Indonesian mining sector.”
The deputy majority floor leader said lawmakers would decide whether to keep the clause in a bicameral conference committee once the measure is passed on third reading.
The Senate on Monday approved on second reading Senate Bill No. 2826, which seeks to set up a five-tier margin-based royalty and windfall profit system for the mining industry, which is expected to raise the government’s share in mining profits.
Under the law, mining companies pay corporate income tax, excise tax, royalty, local business tax, real property tax and fees to indigenous communities.
“So, we’ll see if we can extend the time to set up their factories and processing plants to seven years instead of five, which the chamber thinks is too short,” Mr. Ejercito said.
The Chamber of Mines on Wednesday backed the bill’s approval but called on senators to scrap the raw ore export ban, saying it would lead to hundreds of thousands of Filipino workers losing their jobs.
The mining group said mining companies are unlikely to finish building their plants within five years, adding that the ban could disrupt mineral trading.
The bill calls for a five-tier margin-based royalty system ranging from 1% to 5%, while the five-tier windfall profit tax system will range from 1% to 10%.
The House of Representatives approved its version of the bill in September.
Under House Bill No. 8937, large-scale miners inside mineral reservations must pay the government only 4% of their gross output, while the Senate version requires them to pay 5%.
The House version proposes an eight-tier margin-based royalty regime of 1.5% to 5% and a 10-tier windfall profit tax system of 1% to 10%.
Mr. Ejercito also pushed the construction of more power plants to address high power costs that mining companies are worried about. “I’m hoping that in the next three years of the administration, we can focus on infrastructure and energy.”
“We need more power plants, stable but cheap energy, and with this development (new mining fiscal regime), it is with further urgency that the government needs to act on this.”
The Department of Finance expects to generate P6.26 billion in additional annual revenue from the revised mining tax regime. — John Victor D. Ordoñez
