Philippine Daily Inquirer - Foreign trade bloc backs LGU tax measures

15 October 2012

By Riza T. Olchondra | Philippine Daily Inquirer

inquirer_businessThe Joint Foreign Chambers of the Philippines (JFC) has expressed its support for a proposed set of measures that will ease the flow of mining benefits to the communities hosting them.

Lately, local government units (LGUs) have been complaining about the delays in their share of mining taxes, which are routed through the national government.

In a letter to Senator Ferdinand R. Marcos Jr., who chairs the Senate committee on local government, members of the JFC said “we would like to express our appreciation for your committee’s effort to initiate deliberation on Senate Bills 1101 and 1419 and House Bill 4410 providing for the direct remittance to the host local government unit of its 40-percent share of the gross collection derived by the national government from national wealth taxes.”

Such “vital legislation” ensures that LGUs will not only get their fair share of remittances from the mining industry, but will also receive it “in a timely manner,” the umbrella group for foreign business chambers said.

The Chamber of Mines of the Philippines (COMP), which has also pushed for the direct remittance of mining taxes to LGUs, said in a statement that mining projects would “enjoy further support from local communities if the latter could immediately realize the fiscal benefits due them from mining.”

Michael Toledo of Philex Mining Corp., a member of COMP, said in a phone interview that if LGUs were to promptly receive their share of mining taxes, then they would be in a much better position to provide residents with basic services and infrastructure.
“Our position has always been that LGUs should get their equal share (of mining taxes) and get them soonest,” Toledo said.

Mines and Geosciences Bureau (MGB) director Leo Jasareno said in a text message that the measures are a “positive development” in the effort to make people “fully realize” the benefits of mining projects to the development of communities.

“We have seen communities rise against mining projects on the impression that they get less or even nothing but the disturbance brought about by the extractive nature of mining. We hope to see mindsets change,” Jasareno said.

The Mining Act is supposed to promote the welfare of provinces rich in mineral deposits, JFC noted, but several LGUs have closed their provinces to mining, partly because of the slow remittance of their share in mining benefits.

The group of foreign firms said LGUs have a Constitutional right to get their fair share of proceeds from national wealth development within their area even as they have a duty under the Local Government Code of 1991 to protect and “co-manage” the environment.

The Philippines is estimated to hold $1.4 trillion worth of mineral reserves, especially gold, copper, nickel, aluminum, and chromite. According to MGB, the Philippines is the second richest country in the world in terms of gold resources, and third in copper.

Mining is among the “Seven Big Winners” or growth sectors that the JFC is pushing for development in line with its Arangkada Philippines 2010 initiative.