New executive order on mining in the works — Finance chief

With the goal of ensuring the national treasury “gets its fair share of revenues” the Aquino administration is preparing an executive order (EO) to lay down new policies on mining, Finance Secretary Cesar Purisima revealed Thursday.

Purisima said Executive Secretary Paquito Ochoa Jr. heads the committee doing the policy review and that the revenue sharing in place for the Malampaya natural gas project is the template being considered.

“That’s the type of contract that we would like to see in mining…The DOF wants a higher revenue share and we want mining rights auctioned and not given away,” the Finance chief said.

According to the Mines and Geosciences Bureau there are more than 500 mining lease contracts, permits, and agreements in effect nationwide.

Aside from 50-50 revenue sharing, Purisima said the new EO to be issued “as soon as possible” will plug loopholes in the current policies he claims are hurting the government’s revenue efforts.

He cited the tax incentives of the Board of Investments and Philippine Economic Zone Authority which could be limited by the EO in development.

“Mining laws and incentives have been taken advantage of,” said Purisima pointing out that only two mining firms opted to enter into Financial and Technical Assistance Agreements (FTAA) while the rest prefer to operate under Mineral Production Sharing Agreements (MPSA).

FTAAs allow for full foreign ownership but provides for 50-50 revenue split while MPSAs have only 40 percent foreign ownership and impose a two percent tax.

“We want to see more FTAAs, rather than MPSAs,” Purisima said. — ELR, GMA News