The Philippines is a leading producer of nickel and a significant producer of gold and copper. The country also exports iron ore, chromium, zinc and silver, and produces some oil and gas. The extractive sector makes a relatively small contribution to the national economy, accounting for less than 1% of the country’s GDP and 7.9% of total exports in 2021.
There is considerable anti-mining sentiment in the country, especially in communities affected by the environmental impacts and displacement of indigenous peoples caused by mining operations. There are also debates about whether local governments are getting their equitable share of natural resource revenues.
The EITI has been used as a platform to show the direct and indirect contributions of the extractive sector to the economy, improve public understanding of the management of natural resources and public availability of data, and create opportunities for stakeholder dialogue and constructive engagement in natural resources management. Philippines EITI (PH-EITI) aims to strengthen systematic disclosures, beneficial ownership and contract transparency, and to expand EITI reporting to cover non-metallic mines, royalty payments to indigenous communities, gender and small-scale mining.
Economic contribution of the extractive industries
- to total government revenues
- to exports
- to GDP
- to employment
Как ИПДО используется для борьбы с коррупцией
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- PH-EITI identified subnational implementation of EITI processes as one of its strategic objectives for 2023-2028 and in 2023 compiled a directory of Provincial and City Mining Regulatory Boards across the Philippines, evaluating their potential in facilitating local-level EITI implementation.
- PH-EITI identified the formulation of policy proposals – including processes and mechanisms of natural resources governance – as one of its strategic objectives for 2020-2022.
- In 2020, PH-EITI published a scoping study on Women and Large-Scale Mining in the Philippines. The study presents several recommendations for addressing key issues and policy gaps, including amendments to the Philippine Mining Act of 1995 to incorporate gender-sensitive provisions. It also suggests measures for mining companies and local governments on how mining can be more responsive to women and gender issues.
- PH-EITI carried out a study on beneficial ownership and politically exposed persons related to extractive companies to examine current disclosure practices, gaps and barriers.
- PH-EITI conducted a mainstreaming feasibility study, which aims to inform EITI implementing agencies on how extractives information can be systematically disclosed.
The Philippines’ mining sector is principally governed by the Philippine Mining Act of 1995, which defines the scope for the exploration, development, utilisation and processing of mineral resources. Small-scale mining is governed by the People’s Small-Scale Mining Act. The oil and gas sectors are governed by the Oil Exploration and Development Act, while coal is governed by the Coal Development Act.
The Tax Reform for Acceleration and Inclusion (TRAIN) Law of 2018 amended several provisions of the National Internal Revenue Code, particularly the excise tax rates on minerals, mineral products, and quarry resources, as well as on coal and indigenous petroleum.
The extractive sector is mainly regulated by the Mining and Geosciences Bureau and Environmental Management Bureau under the Department of Environment and Natural Resources (DENR) and the Department of Energy (DOE). Subject to the President’s approval, the latter departments may enter into petroleum service contracts and coal operating contracts with qualified operators. The Department of Finance (DOF) and its bureaus, such as the Bureau of Internal Revenue (BIR), manage all revenue-related issues.
Mining contracts are negotiated by the Department of Environment and Natural Resources (DENR) with permit holders or mining contractors. Major contract types include exploration permits (EPs), mineral production sharing agreements (MPSAs) and financial and technical assistance agreements (FTAAs) with foreign-owned corporations for large-scale exploration, development and use of mineral resources.
Petroleum service contracts and coal operating contracts are awarded through competitive bidding and negotiations by the Department of Energy. The DOE secretary endorses the awardees to the President for final approval.
The DENR’s Mines and Geosciences Bureau publishes mining permits and contracts, while the Department of Energy publishes petroleum service contracts. PH-EITI also publishes extractive contracts via its online portal.
In 2019, the Philippines’ Securities and Exchange Commission (SEC) mandated corporations to declare their beneficial owners and their information, including complete name, residential address, nationality, tax identification number, and percentage of ownership or voting rights. The SEC further clarified that this applies to foreign corporations in the Philippines. In 2021, it provided further guidelines on beneficial ownership transparency.
In 2021, PH-EITI launched an online beneficial ownership registry of extractives companies based on company declarations submitted to the SEC and PH-EITI. While many companies partially or fully disclosed beneficial ownership information, the registry is not yet comprehensive.
In 2021, the Philippines became a participating country in Opening Extractives, a global five-year programme delivered by the EITI and Open Ownership to strengthen the availability and use of beneficial ownership data. Draft legislation to strengthen beneficial ownership disclosure and align reporting requirements with Requirement 2.5 is in progress.
The Philippines’ Constitution and Local Government Code stipulate that local government units should have an equitable share in the proceeds derived from natural resources developed in their respective areas, and that these should benefit the inhabitants of those jurisdictions.
Local government units are entitled to a 40% share of the national government receipts from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and other taxes, fees or charges, and from its share in any co-production, joint venture, or production sharing agreement.
Under the Local Government Code (Sections 289 to 292), shares of natural resource revenues are to be distributed to provinces (20%), municipalities (45%) and districts or barangays (35%), where the natural resources are developed in the respective provinces. Where they are developed in a highly urbanised or independent component city, they are distributed to municipalities (65%) and barangays (35%).
PH-EITI is administered by the Philippines’ Multi-Stakeholder Group (MSG). The MSG is hosted by the Department of Finance (DOF) and chaired by the DOF Undersecretary Bayani H. Agabin. It is composed of representatives from government, industry and civil society.
Government announces commitment to join the EITI
Multi-stakeholder group is formed
Candidature application is submitted
2012 EITI Report published
2013 EITI Report published
2014 EITI Report published
2015-2016 EITI Report published
2017 EITI Report published
2018 EITI Report published
2019 EITI Report published
2020 EITI Report published
2021 EITI Report published
Philippines achieved a moderate overall score (80 points) in implementing the 2019 EITI Standard, following its second Validation. Corrective actions relating to “Stakeholder Engagement” will be reviewed in January 2024. The date of the next Validation is yet to be confirmed.