Revenue loss from mining ops closure, suspension at PHP821M

The Department of Finance (DOF) on Monday placed revenue loss by municipalities and cities affected by the suspension and closure orders of 28 mine sites to around PHP821 million, higher than the earlier estimate of about PHP650 million.
(Photo: Edgar Dann Alcantara, Sheena Thea Alcantara/Wikipedia)

MANILA—The Department of Finance (DOF) on Monday placed revenue loss by municipalities and cities affected by the suspension and closure orders of 28 mine sites to around PHP821 million, higher than the earlier estimate of about PHP650 million.

Finance Secretary Carlos Dominguez III recently said three municipalities will lose more than 50 percent of their operating income once the suspension and closure orders take effect.

These municipalities are Carrascal in Surigao del Sur, Tagana-an in Surigao del Norte, and Tubajon in Dinagat Islands.

In a statement, the DOF said latest estimates submitted by the Bureau of Local Government Finance (BLGF) to Domiguez showed that Carrascal will lose about PHP198.3 million of its mining revenues or about 62.3 percent of its total operating income.

Tagana-an, in turn, will lose about 54 percent of its total operating income amounting to around PHP70.3 million and Tubajon, PHP38 million or about 55.4 percent of its total operating income.

The statement explained that these latest estimates do not yet include the impact of last week’s order by the Department of Environment and Natural Resources (DENR) to cancel mineral production sharing agreements (MPSAs) of 75 mine sites.

”…the Bureau’s updated estimates on the impact on local financial of LGUS (local government units) hosting mining firms ordered for suspension and closure by the DENR…constitutes 100 percent compliance of local treasurers ordered to submit (Fiscal Year) 2016 LGU data,” BLGF acting executive director Nino Alvina said in his report to Dominguez.

”The total estimated potential revenue loss from the direct payments of mining firms and the shares from mining taxes of affected LGUs amounted to PHP821.13 million, he said.

Alvina explained that of the total loses, affected local collections of the LGUs from mining companies will be around PHP340 million comprising of PHP53.54 million in real property taxes (RPTs), PHP263.13 million from business tax, fees, charges and other local charges, and PHP23.29 million from provincial revenues.

Share of the affected LGUs from mining taxes collected by the national government will be about PHP481.17 million, he said.

Alvina said 70 percent of the RPTs collected by cities goes to the LGUs while the balance of 30 percent is shared by the villages, with 50 percent allocated for the village directly affected by the mining operations and the remaining 50 percent for the component villages.

On the other hand, RPTs collected by the provincial governments are shared among the province, 35 percent; municipality, 40 percent; and the villages where the mining site is located, 25 percent.

BLGF, in its earlier report to Dominguez, said LGUs affected by the suspension and closure orders are from Benguet, Nueva Viscaya, Palawan, Cebu, Bulacan, Zambales, Eastern Samar, Dinagat Islands, Surigao Del Norte, and Surigao Del Sur.