DoF orders assessment of revenue impact of mines closure

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The Department of Finance (DoF) has directed local treasurers in areas hosting mining projects to assess the impact of the closure or suspension of 28 mine sites across the country on local government revenues.

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Finance Secretary Carlos Dominguez 3rd said in a statement issued on Monday, he issued the directive because alongside the massive loss of jobs and its effect on the national economy, last week’s move by the Department of Environment and Natural Resources (DENR) might imperil the fiscal state of the affected local governments, given that mining companies account for a hefty part of the tax revenues collected by local governments in municipalities hosting mine sites.

Earlier, he also told reporters, “On the revenue side, our primary concern is the revenues of the municipalities.
That’s why we asked the treasurers already to give us a quick-round assessment of how much is going to be lost in revenues.”

The DoF said preliminary data from its Bureau of Local Government Finance (BLGF) showed that at least 10 municipalities and one city would be affected by the DENR’s order to close down 23 mine sites, while one city and four municipalities would be affected by the suspensions.

In an immediate reaction, the Chamber of Mines of the Philippines (COMP) had estimated that almost P70 billion in gross production value and close to P20 billion in taxes would be lost if the DENR decision pushed ahead. About 67,000 jobs are also at risk, it said.

Last year, local governments hosting mining projects received P233.8 million or 40-percent of the P585 million in mining taxes collected from December 2011 to the fourth quarter of 2014.

In response to Dominguez’s directive, BLGF Executive Director Niño Alvina said he has issued a memorandum “directing city and municipal treasurers in all localities hosting mining projects to submit their complete and updated reports by Friday, February 10.”

Treasurers of local governments are under the supervision of the Do through its BLGF, it noted .

In Department Order 049-2016 issued in September last year, Dominguez instructed local treasurers to include in their quarterly and annual financial reports all environment and natural resources revenues and expenditures, particularly the payments made by the mining and other extractive industries to their respective local governments.

This DO provides for an efficient mechanism for municipal treasurers in LGUs hosting mine sites to present their respective assessments fast enough given that they have been forwarding their Statements of Receipts and Expenditures electronically since 2011 and are now required to submit them through the web-based Environment and Natural Resources Data Management Tool (ENRDMT).

These assessment reports, Dominguez said, will aid the government in coming up with a comprehensive strategy to address the impact of the DENR move on the employment and fiscal situations in the communities where the concerned mining sites are located.

Dominguez also said he has called for a meeting of the Mining Industry Coordinating Council (MICC), which he co-chairs, to assess the impact of the DENR directive.

“We’re just waiting for the response of the other members of the MICC. We want to have it next week as soon as possible,” he has said.

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1 Comment

  1. Oh, but Gina Lopez acts like she’s a bigger financial whiz than Secretary Dominguez, proclaiming that mining means only minimal revenue to government. She is buying into the old anti-mining propaganda that mining pays only a 2% Excise Tax. She fails to mention that not only does mining pay Corporate, Business and Value-Added Taxes among others, plus numerous fees and permits, they also finance community development projects, infrastructure, and yes, reforestation and rehabilitation. She won’t say that mining is the biggest single contributor to tree planting. Furthermore, this self-proclaimed economic wizard declares with all confidence that mining is not labor intensive, so job loss will not be critical. I repeat: She said mining is not labor intensive. I’ll just leave that here.
    Like any non-technical rabble-rouser, she appeals to the emotion rather than the facts, ranting into a micrtophone made of miunerlas on a stage held together by iron nails and bolts. She tries to convince an uninformed public that all mining is evil. Now if the mine is guilty, then penalize them according to law. But what she did is dictatorial and downright illegal. She would not allow the very auditors of the Mines and Geosciences Bureau to attend the deliberation on their own findings. The ones that attended were her anti-mining cronies. Then she violated the law by immediately ordering the closures when she was required to present her findings to the mines in questions and await their response.
    Seems that there’s a lot of extra-judicial mindset going around lately.