MANILA - The Commission on Audit (COA) has questioned the Mines and Geosciences Bureau (MGB) about its failure to collect royalties amounting to P2.668 billion from five mining companies operating in Caraga Region from 2012 to 2016.

In the 2017 audit report on MGB, government auditors noted that mining companies operating within the Mineral Reservations Area of Caraga Region paid both excise taxes and royalties.

However, five companies operating outside the MRA only paid 2% excise taxes based on their existing Mineral Production Sharing Agreements (MPSA).

The COA noted that under the Implementing Rules and Regulations of the Philippine Mining Act of 1995, contractors, permit holders and lessees shall pay royalties no less than 5 percent of their gross output, exclusive of all other taxes.

“Under the law, mineral resources are owned by the State. There is no distinction between minerals found or located within or outside mineral reserved areas,” the COA said.

The five mining companies identified by the COA and their corresponding royalties are as follows:

- Agata Mining Ventures, Inc, P25.082 million (2014 to 2016 only);

- J.C.G. (Greenstone) Resources Corporation, P392.907 million;

- Marventures Mining and Development Corporation, P475.338 million;

- PHILSAGA Mining Corporation, P1.047 billion;

- SR Metal, Inc., P728.414 million.

The COA noted that there was a failure to declare the mining areas where the five mining companies operate as a “mineral reservation” prior to the granting of their permit to operate or the signing of the MPSA.

The MPSAs of the five mining companies were granted from 1999 to 2008.

“Collection of royalty from mining companies should be the prime consideration of the government for the preservation and restoration of the environment,” the COA said.

The MGB, currently headed by acting Director Wilfredo Moncano, agreed to the initiate measures so that the mining companies will be made to pay royalties to the government, according to the COA.

“We recommended and management agreed to make representation with the DENR (Department of Environment and Natural Resources) Secretary to either recommend to the President to issue authority for the inclusion of the area where the mining companies operated outside Mineral Reservation Area or to issue pertinent authorization for the imposition of royalty against the mining companies, regardless of whether they operate within or outside the MRAs,” the COA said.

The COA also said the MGB management agreed to propose guidelines on royalty fees for the approval of Congress.

Meantime, the COA also noted that the share from national wealth coming from royalties collected by Regions III and XIII amounts to P1.126 billion.

The 2017 figure is higher compared to collections in 2016 totaling P1.085 billion, but there was a “drastic decrease” in the revenue collection of Region III due to the indefinite suspension of Benguet Corp. Nickel Mines, Inc.