This EITI Report was published in December 2020 and covers the 2018 fiscal year. It is the Philippines' 6th EITI Report.
The Philippines is a leading producer of nickel, a significant producer of gold and copper, exports some iron ore, chromium, zinc and silver, and produces some oil and gas. According to the 5th EITI report (FY 2017), the Malampaya gas field - which provides about 40% of the power supply needs of Luzon, which island group generates around 72% of national GDP - is expected to drop to one-third of its current output in 2024 and to stop by 2029.
The extractive sector in the Philippines makes a relatively small contribution to the national economy. The latest disclosure (2018 EITI Report) shows the mining sector contributes the most in the sector with 0.89% to GDP and 5.99% to total exports. However, there is considerable anti-mining sentiment in the country especially at subnational levels where environmental impact and displacement of indigenous peoples caused by mining operations have been the focus of much debate. Small-scale mining is also contentious, due to poor regulations and overlapping policies between central and local government.
The EITI has been used as a platform for dialogue by stakeholders, and as a source of credible information to inform policies on the appropriate fiscal regime for mining. The government is implementing reforms in the mining sector which include an audit of mining companies' compliance with environmental regulations and rules on social expenditures. The Philippine EITI Report complements this effort by providing information on companies' mandatory and voluntary social expenditures and contributions to mandatory environmental funds.
The main taxes levied on the mining sector are corporate income tax, excise tax on minerals and royalties on mineral reservations, while the major oil and gas levies are the government’s share in oil and gas revenues, corporate income tax and withholding tax on profit remittance to principal.
The Bureau of Internal Revenue (BIR) is the main body responsible for collecting taxes paid to central government, while the Mines and Geosciences Bureau of the Department of Environment and Natural Resources and the Department of Energy collect sector levies for mining and coal, oil and gas respectively. Local government units (LGUs) are responsible for collecting subnational payments.
As for February 2021, the PH-EITI contracts portal contained 155 contracts pertaining to the extractives sector.
Guide on Philippine Taxation
Philippines Tax Profile
|Contracts in Philippines |
The Philippines’ mining, oil and gas contracts
Oil and gas service contracts (PSCs) are awarded through competitive public bidding, while mining permits are awarded through direct negotiation. Several moratoriums on the issuance of mining licenses implemented in previous years from 2012 to 2017 have affected the number of mining projects in the country.
As of February 2021, there were 309 Mineral Production Sharing Agreements, 5 Financial or Technical Assistance Agreements and 13 existing Exploration Permits for the mining sector.
Approved mining permits and contracts
Department of Energy figures and maps
Beneficial Ownership (BO) disclosure and Politically Exposed Persons (PEP) reporting in the Philippines has been a significant aspect of transparency in the Philippines. The multi-stakeholder group identifies tax evasion, money laundering, and compliance with the Constitutional provisions on the nationality of mining companies as the national issues that their work on beneficial ownership aims to address. It faces constraints, however, in terms of data privacy restrictions.
The Philippines EITI previously published a Beneficial Ownership (BO) roadmap on 15 December 2016. Several milestones of the Roadmap have been accomplished by the beginning of 2021, including the integration of BO in the mainstreaming efforts of PH-EITI, the increased coordination with the SEC and the pilot disclosure of BO information. According to the 2018 EITI Report published in December 2020, 41 out of 65 covered companies/projects fully or partially disclosed beneficial ownership information. A total of 128 name entries were declared as beneficial owners.
Securities Exchange Commission (SEC) Memorandum Circular (MC) No. 15 (issued in July 2019) enhanced the BO Declaration form. The revised General Information Sheet (GIS) under MC No. 15 mandates corporations to fill out a beneficial information declaration form that asks for nine categories of beneficial owners and their information, including complete name, residential address, nationality, tax identification number, and percentage of ownership or voting rights.
While there is currently no public register of beneficial owners, work has begun to ensure that BO information, contracts and extractives information is integrated into one publicly-available portal.
The Philippines is a leading producer of mineral commodities such as nickel, gold and copper. While mineral production volume increased slightly in 2018, production has gradually decreased since 2015 -2017. Nevertheless, the country is only behind Indoneisa as the world's leading produder of nickel. Other commodities being produced in the Philippines include chromite, zinc, iron, silver, crude oil and natural gas. While the mineral sector slightly picked up in 2018, coal saw a slight dip in production compared to its 2017 value.
Domestic oil production follows a similar trend as coal - declined from 3 million barrels of oil in 2014 to only 1.1 million barrels in 2018.
Exploration activities in mining are spread nationwide, while coal production is focused in the province of Antique. Oil and gas exploration is focused offshore.
The Philippines is one of the most highly mineralized countries in the world with vast reserves of gold, silver, copper, nickel, and chromite. In 2018, the Philippines accounted for 6.4% of the world’s total estimated reserves of nickel.
|Gas||3772||billion cubic feet|
|Gold||4536||billion metric tons||The Philippines has the world’s third largest reserves of gold.|
|Coal||297.76||million metric tons|
|Copper||5051||million metric tons|
|Nickel||783||million metric tons||The Philippines has the world’s fifth largest reserves of nickel.|
|Chromite||38||million metric tons|
|Zinc||11.4||million metric tons|
|Iron||483||million metric tons|
|Molybdenum||306||million metric tons|
For details on the scope of data included, please consult the EITI Reports.
The latest EITI disclosures (2018) show that the Philippines received USD 1.3 billion (PHP 63.4 billion) from the extractive industry. This was a 38% and 57% increase compared to 2017 and 2016 ( USD 790 million or Php 37.8 billion in 2017). Almost 74% of these revenues came from oil and gas, with the rest from mining.
Oil and gas revenues were mainly collected through the government’s share of oil and gas production (41% of oil and gas revenues) and corporate income tax (27%), while mining revenues were mainly collected through corporate income tax and output VAT.
Local government units (LGUs) are entitled to 40% of the total collections from extractive companies in their locality. To facilitate the transfer of LGUs’ shares, the relevant central government agencies issue a certification to the Department of Budget and Management (DBM), which is then tasked to release the shares to the LGUs.
Starting 2016, the country also implemented a system of direct transfers of shares from the Bureau of Treasury to the LGUs, effectively speeding up subnational transfers. Currently, DBM is finalizing the draft joint circular containing enhanced guidelines with provisions for the following: streamlined processes, compressed schedules, transparency in the allocation of the shares, and posting/reporting requirements in the utilization of the shares.
The 2018 report recorded a total of PhP 63.4 billion in reconciled revenues from the mining, oil, and gas industries for 2018. This amount is higher by 68% than the reconciled revenues reported in 2017. The report explains that the increase was a result of the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and the overall improvement of the PH-EITI reporting process, among other factors.
In order to improve reporting of subnational data, the PH-EITI has collaborated with the Bureau of Local Government and Finance to implement an online reporting system for local government units. This system ensures timely reporting of extractive revenues in mining communities. With the implementation of Local Government Unit (LGU) online reporting, reported LGU reconciled amount increased from PHP 452 million in 2014 to PHP 626 million in 2016 and PHP 1 million in 2017.
The PH-EITI MSG has agreed to implement mainstreaming, and has taken steps to ensure further mainstreaming of its EITI implementation. The PH-EITI has initiated the Systematic Electronic Extractives Disclosure or SEED initiative, which is a package of innovations developed by PH-EITI and/or its partner agencies and organizations to mainstream extractives transparency in the Philippines.
The 2020 workplan includes several steps on advancing mainstreaming further, including:
- Implementation of a scoping study on mainstreaiming
- Review of the MSGs roles and responsibilities in light of PH-EITI moving towards mainstreaming
In 2019, the MSG agreed that mainstreamed EITI implementation in the Philippines would have a central portal and could potentially involve other interconnected, uniform, and standardized portals of implementing government agencies and companies.
It was also decided that thier forthcoming 6th EITI report (FY 2018) will be produced as a transitional report for mainstreaming. Data will be collected through the Online Reporting in the Extractives tool (ORE) and published on the PH-EITI website.
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
- The 2018 EITI Report includes a pilot reporting of over 100 beneficial owners
- The 2018 Report used an Online Reporting in the Extractives (ORE) tool that has been developed to make reporting of companies and national government agencies more efficient and cost-effective. The ORE tool continues to be enhanced with a view to possibly making it the official central data collection and disclosure system among reporting entities.
- The 2017 Report also includes a pilot report on transparency in Small-Scale Mining (SSM) in South Cotabato.
- The 2015-2016 EITI Report includes a scoping study on beneficial ownership and a pilot reporting of six large-scale non-metallic mining companies.
- A contracts portal was launched in October 2015, extracting contract information from PDF and allowing more interactive use.
- The 2014 EITI Report includes information on Mining Forestry Programmes as well as a list of environmental projects and expenditures of mining companies
- The 2013 EITI Report includes two scoping studies on small-scale metallic mining and large-scale non-metallic mining.
- The 2012 Report in cludes figures on commodity reserves and information on free and prior informed consent (FPIC), environmental funds and detailed explanations of contracts and the policy for contract disclosure.
The Government of the Philippines committed to implementing EITI on 6 July 2012, through Executive Order No. 79. The following year, in 2013, the Philippines officially became an EITI candidate country. The MSG’s Terms of Reference notes the roles and responsibilities of MSG members.
The PH-EITI work plan, agreed by the MSG, contains the following five objectives for EITI implementation in 2020-2022, reflecting on national priorities in the extractive sector:
1. Improve the platform of commitment for transparency and create a safe space for dialogue and debate on natural resource governance.
2. Maintain an impartial and verified database on the extractives sector.
3. Develop capacities to effectively participate in natural resource governance.
4. Strengthen and expand the linkages of EITI.
5. Formulate and propose policy reforms, including processes and mechanisms of natural resource governance.
An Open Data Policy was agreed in 2016.
PH-EITI is administered by the Multi-stakeholder Group or MSG chaired by the Department of Finance, and composed of representatives of government, industry, and civil society.
- The government is represented by the Department of Finance, Department of Environment and Natural Resources-Mines and Geosciences Bureau, Department of Energy, Department of the Interior and Local Government, and the Union of Local Authorities of the Philippines.
- The industry or business sector is represented by the Chamber of Mines of the Philippines, and the Petroleum Association of the Philippines.
- Civil society is represented by Bantay Kita-Publish What You Pay Philippines.
The MSG has been involved in Congressional hearings on legislative amendments where provisions on making the EITI mandatory for companies are included.
The EITI has helped create opportunities for dialogue and constructive engagement on issues of extractive industries management, helping to start building trust and reduce conflict between the three constituencies.The PH-EITI Secretariat and MSG have been proactive in ensuring the public accessibility of EITI information both through online channels, in hard copy through dissemination and outreach events and through several ‘use of data’ events.
Name of Chairman of MSG:
Ms Maria Teresa S. HABITAN, Assistant Secretary, Department of Finance, Philippines
Name of National Coordinator:
- Department of Finance
- Department of Environment and Natural Resources-Mines and Geosciences Bureau
- Department of Energy
- Department of the Interior and Local Government
- The Union of Local Authorities of the Philippines
The country was admitted as EITI candidate in 2013.
The Philippines' Second Validation will commence in April 2021.
This EITI Report was issued in December 2018 and covers the 2017 fiscal year. It is the Philippines's fifth EITI Report.
The Annual Progress Report provides an overview of all EITI Philippines's activities from July 2017 to June 2018.
The Philippines' Validation commenced on 1 January 2017. On 5 October 2017, the EITI Board found that the Philippines has made satisfactory progress in implementing the 2016 EITI Standard.
The following documentation laid the basis for the Board's decision, attached below:
Report on the Initial data collection by the International Secretariat (English, French)Draft Validation Report by the independent Validator ASI (English)Philippines EITI multi-stakeholder group's comments on the draft Validation Report and initial data collection (English)Final Validation Report (Eng
This EITI Report was issued in December 2017 and covers 2015 and 2016 fiscal years. It is the Philippines's fourth EITI Report.
The Annual Progress Report provides an overview of all EITI Philippines's activities from July 2016 to June 2017.
This study provides the contextual information on small-scale metallic mining that was included in the second Philippine Extractive Industries Transparency Initiative Country Report in December 2015. It particularly focuses on the legal and regulatory framework and the revenue streams as well as the general state of small-scale mining operations of gold, silver and chromite in the Philippines. The report also provides recommendations to the Philippine EITI Multi-Stakeholder Group (MSG) on how to approach the reporting of payments from this sector,