Access to the US$1.4 trillion Philippine mining sector has been hindered by issues of indigenous land rights, environmental protests and complicated legislation since the 1980s. All that could be about to change with the introduction of Executive Order 79, a one-stop-shop for mining permits.
Executive Order 79, which is currently awaiting congressional sign-off, replaces two smaller taxes with an excise tax of 10% on gross sales of minerals, as well as addressing environmental concerns. The order also calls for more transparency from local authorities and may calm fears of corruption, particularly around awarding of contracts.
Despite holding the world’s second largest gold reserves, along with significant deposits of copper and nickel, mining accounted for less the 1% of the Philippines economy in 2012. The government, led by President Benigno “Noynoy” Aquino, has been working to change this. Economic growth in the Philippines currently sits at around 6% and the Aquino administration see tapping into mineral wealth as key to sustaining growth.
Officials from Manila have been actively seeking foreign investment in mining, with the aim of creating jobs and increasing government revenue, for some time. However, the number of mining companies around the world waiting for permits reflects the administrative hold-up. The bottleneck worsened as politicians negotiated the environmental regulations and a fiscal mining framework outlined in Executive Order 79.