MANILA, Philippines - President Benigno Aquino said a proposed measure that will seek to impose more taxes on mining companies is not a priority for Congress, which enters its third and final session this month.
In an interview with ANC's Inside Business, Aquino said he considers the sin tax law and the amendment to the Anti-Money Laundering law to be priority measures for Congress, over the proposed measure that will increase the government's share in mining revenues.
"Well there are other measures that are pending before (mining tax). For instance, the sin tax measure is in a mature form already. We’re very close to that, the other is the third law with regards to the Anti-Money Laundering, which is also a priority. In effect, there are so many priorities, they really have to make a firm priority. So the mining (law amendment), I think can wait a little while, becasue there are the two that are more important than this one, at this point in time," he said.
Congress is expected to focus on the passage of the sin tax reform bill and the amendment to the Anti-Money Laundering Act before it adjourns for elections in 2013.
The President's statement dashes the hopes of the mining industry for the lifting of the current moratorium on new mining contracts. Executive Order 79 extended a moratorium on the approval of new mining agreements until Congress passes a new revenue-sharing scheme between the government and mining companies.
The government is seeking to raise the government's revenues from mining by increasing the excise tax on mining from the current 2% to a range of 5-7%, as well as include a 5% royalty in future mining contracts and areas to be declared as mineral reservations.
Aquino did not seem to have a problem with the moratorium continuing on for the next year or two.
"Well, I’ll go back, are we getting the benefits that we should be getting from it? So if we hasten to continue that which was not beneficial to our people, I don’t see the logic in that. Better to put a hold in it, preserve the resources and get the maximum benefit for it for our people," he said.
Early last week, the President issued Executive Order 79, which set the policy framework for the mining sector. Both the mining industry and environmentalists had strong opinions on how the mining policy, which perhaps delayed the process of the EO's release.
Asked if the mining issue was one of the toughest challenges he has faced so far, Aquino said, "I wouldn’t say it was one of the toughest, but you had one of the noisest lobbies from both sides of the equation... I try to listen to everybody and come to a consensus that everybody can live with even if they're not happy with it."
Aquino said there were many different factors to be considered when the mining EO was being crafted.
"One of the things we had to vet was exactly what does, you know when the mining industry says 'we contribute x amount to the economy.' I have to check, exactly what did they contribute and from our figures, about a 140, billion and we get around less than 10% in terms of the duties. We get 100% of the problem, and 10% of the revenues accruing from it. And of course it’s extractive, once its gone, it's gone," he said.
The EO also expanded the "no-go" mining zones in the country to include 78 tourism spots, farms, marine sanctuaries and island ecosystems, in response to concerns raised by environmentalists.
Asked to pick between mining and eco-tourism as his vision for the Philippines, Aquino replied, "Well, I think there’s no question, if there’s a choice between the two. Ecotourism continues on and on and on, while you preserve the sites. Mining, once the minerals are gone, that's it. What happens if it is, if they don’t adhere to the provisions that protect the environment, is a damaged environment that will take years and years to rebuild. And again, I go back, 100% of the problem. and less than 10% of the gain. That I think is a very lopsided equation."
The full interview with President Aquino will be aired on ANC's Inside Business, hosted by Coco Alcuaz, at 7:30 p.m., Wednesday (July 18).