PH-EITI Media Training Overview of Extractive Industries for Seminar - Workshop and Media Fellowship on Covering the Extractive Industries: Digging Out Stories that Matter

1. Overview of Extractives
Industries
ABIGAIL OCATE
Technical Manager
PH-EITI Secretariat

2. RELEVANT LAWS
 Philippine Mining Act of 1995 (RA No. 7942)
 Institutionalizing and Implementing Reforms in the
Philippine Mining Sector, Providing Policies and
Guidelines to Ensure Environmental Protection and
Responsible Mining in the Utilization of Mineral
Resources (EO 79)

7. Mineral Industry Statistics
Total operating metallic mines: 41
Gross production value:
Large-scale metallic: 102 billion
Small-scale gold mining: 0.7 billion
Non-metallic mining: 73.6 billion
Contribution to GDP: 0.6%
Metallic contribution to total exports: 4.1%
Contribution to total employment: 0.5%

8. OVERVIEW OF THE 3rd REPORT
 The Report has 2 chapters:
Ch 1: Contextual information about the extractive sector
– Legal and institutional framework governing the extractive sector
– Summary of Extractive Sector contribution to the economy
– Distribution of revenues
– Social and economic spending
Ch 2: Reconciliation Report and MSG recommendations
(with assessment of progress)
– Presents the results of the reconciliation procedures and contains
information on the material revenue streams from the extractive
industry
– Recommendations formulated by the PH-EITI MSG
 Independent Administrator:
 Isla Lipana & Co. PwC Philippines

9. SCOPE OF THE REPORT
 13 revenue streams including 8 mandatory
expenditures and funds
 36 participating companies (31 large-scale metallic
mining, 5 oil and gas)
 7 government agencies (BIR, MGB, DOE, NCIP, PPA,
BOC and DBM)
 63 local government units

10. REVENUE STREAMS
BIR revenue streams (6):
1.Corporate income tax
2.Excise tax on minerals
3.Withholding tax on foreign shareholder
dividends, on profit remittance to principal
and on royalties to claim owners
4.Value added tax on importations

11. REVENUE STREAMS
DOE – Government share from oil and gas
production
MGB – Royalties from mining operations
BOC – Customs duties
LGU – Business tax and RPT
NCIP – Royalty to IPs

12. COMPARING THE FIRST THREE
COUNTRY REPORTS
1st Report
(FY 2012)
2nd Report
(FY 2013)
3rd Report
(FY 2014)
Number of participating companies 36 36 36
 Mining 30 31 31
 Oil and gas 6 5 5
Number of reporting government
agencies
7 7 7
Number of participating LGUs 32 59 63
Number of covered revenue streams 19 13 13

13. 1. AAM-PHIL Natural Resources Exploration
and Development Corporation
2. Adnama Mining Resources, Incorporated
3. Apex Mining Company, Inc.
4. BenguetCorp Nickel Mines, Inc.
5. Cagdianao Mining Corporation
6. Carmen Copper Corporation
7. Carrascal Nickel Corporation
8. Citinickel Mines and Development
Corporation
9. Filminera Resources Corporation
10. Greenstone Resources Corporation
11. Hinatuan Mining Corporation
12. Johson Gold Mining Corporation
13. Krominco, Inc.
14. Lepanto Consolidated Mining Company
15. Leyte Ironsand Corporation
16. Libjo Mining Corporation
17. LNL Archipelago Minerals, Incorporated
18. Marcventures Mining and Development
Corporation
19. Mt. Sinai Mining Exploration and
Development Corporation
PARTICIPATING COMPANIES
 Mining

14. 20. OceanaGold (Philippines), Inc.
21. Ore Asia Mining and Development
Corporation
22. Pacific Nickel Phils., Inc.
23. Philex Mining Corporation
24. Philippine Mining Development
Corporation
25. Philsaga Mining Corporation
26. Platinum Group Metals Corporation
27. Rio Tuba Nickel Mining Corporation
28. Sinosteel Phils. H. Y. Mining Corporation
29. SR Metals, Incorporated
30. Taganito Mining Corporation
31. TVI Resources Development Philippines,
Inc. – Cagdianao (Canatuan)
 Mining
1. Chevron Malampaya LLC
2. Galoc Production Company
3. Nido Production Galoc
4. PNOC - Exploration
Corporation
5. Shell Philippines Exploration
B.V.
 Oil and Gas

15. KEY FINDINGS
 The Report covers 93% of total revenues in the
mining, oil and gas sectors.
 Total reconciled revenue for 2014 (excluding
funds and mandatory expenditures):
PhP 53,852,731,024

16. KEY FINDINGS
 Distribution of Total
Reconciled Collections

17. KEY FINDINGS
Major Collecting Agencies
• BIR revenue streams (6):
1. Corporate income tax
2. Excise tax on minerals
3. Withholding tax on foreign
shareholder dividends, on profit
remittance to principal and on
royalties to claim owners
4. Value added tax on
importations
• DOE revenue stream (1):
Government share from oil and
gas production
• MGB – royalties from mining
operations
• BOC – Customs duties and
VAT
• LGU – Business taxes and
RPT
DOE
BIR
MGB
BOC
LGU NCIP

18. KEY FINDINGS
 Agencies with least amount of discrepancy
 DOE: PHP 0 (0%)
 BOC: PHP 58,962 (0%)
 Entities with highest percentage of
unexplained variance
 NCIP: PHP 117,136,422 (38.6%)
 LGUs: PHP 56,618,678 (17.7%)

19. PROPORTION OF REVENUE STREAMS
MINING OIL&GAS
Corporate
income tax
Royalty on mineral
reservation
Excise
tax
Withholding tax-
Foreign shareholder
dividends
Others
Corporate
income tax
Government share from
oil and gas production
Withholding
tax- Profit
remittance to
principal

20. DISTRIBUTION OF
LGU RECEIPTS FROM THE
MINING SECTOR
Region VII
Region XIII
Region V
Region II
Region
IV-B
Region XI
 LGU’s percentage share in total
collection:
PHP 320,782,806 (1%)
 Highest-collecting LGUs:
Region VII: PHP 79.7m (24.8%)
Region XIII: PHP 74.1m (23.1%)
Region V: PHP 52.4m (18.32%)
 NCR does not host any mine
project but host most principal
offices received 4%

22. ISO 14001
Companies that are considered compliant as of 20 December 2016 are as follows:
• AAM-Phil Natural Resources Exploration and Development Corporation
• Benguet Corp.
• BenguetCorp. Nickel Mines, Inc.
• Cagdianao Mining Corporation
• Carmen Copper Corp.
• Carrascal Nickel Corporation
• Citinickel Mines and Development Corporation
• Coral Bay Nickel Corporation*
• CTP Construction and Mining Corporation
• Eramen Minerals, Inc.
• FCF Minerals Corporation
• Filminera Resources Corp.

23. • Greenstone Resources Corp.
• Hinatunan Mining Corp.
• Krominco, Inc.
• Lepanto Consolidated Mining Co.
• LNL Archipelago Minerals, Inc.
• Marcventures Mining and Development Corp.
• Mindanao Mineral Processing and Refining Corporation*
• OceanaGold (Philippines), Inc.
• Philex Mining Corp.
• Philippine Gold Processing and Processing Corp.*
• Philsaga Mining Corporation
• Platinum Group Metals Corporation
• Rio Tuba Nickel Mining Corp.
• SR Metals, Inc.
• Taganito Mining Corp.
• TVI Resource Development, Inc.
• Westernshore Nickel Corp.