Govt studies unified mining contract

The government said it is studying the creation of a single mining contract and other mineral industry reforms suggested by the International Monetary Fund.

“We are currently studying the IMF report’s specific recommendations, and this will serve as an important input as we work with Congress and the various stakeholders in proposing amendments to existing laws defining the fiscal regime on all mining activities, whether large or small scale,” Finance Secretary Cesar Purisima said.

The IMF, which conducted a study of the Philippine mining industry in response to the government’s request for technical assistance, recommended the creation of a single contract, instead of the current three.

These three contracts are mineral production sharing agreements outside mineral reservations, MPSAs in mineral reservations, and financial and technical assistance agreements.

MPSAs satisfy the constitutional requirements of 60 percent of local ownership and 40-percent foreign ownership, while the FTAAs are the only arrangement that allows 100-percent foreign ownership.

“A modified version of the FTAA regime should be the only regime available for future large mining projects, as over restricting foreign investment has likely held back investments in the mining sector,” the IMF said.

Meanwhile, the Board of Investments said it was studying the economic provisions of the recently-issued mining policy.

“The EO [79] has already described the policy. This would be the next logical step after the issuance of that EO,” Trade Secretary Gregory Domingo said.

Domingo said the BoI was just one of the technical working groups studying the economic provisions of the policy. Other agencies are the Finance and Environment Departments as well as the National Economic and Development Authority. –Maria Bernadette Lunas, Julito G. Rada, Manila Standard Today