The Philippine government has received P1.129 billion in revenue from a mining company that it gave a go-signal to operate under a production-sharing agreement, the Department of Environment and Natural Resources (DENR) said on Friday, May 3.
This was made possible by a Financial and Technical Assistance Agreement (FTAA) entered into by Oceana Gold Philippines Inc. (OGPI) and the Philippine government.
According to the DENR, the remitted revenue represents the additional government share (AGS) of minerals produced by OGPI, the operator of the Didipio Mine in Northern Luzon.
Environment Secretary Maria Antonia “Toni” Yulo-Loyzaga announced that the initial payment from OGPI under the FTAA had been transmitted to the National Treasury on the same day it was received by the DENR’s Mines and Geosciences Bureau on April 23.
Loyzaga lauded the mining firm for the quick release of the AGS.
“This is a testament to OGPI's contractual commitment as it practices safe and responsible mining," she said.
For her part, Joan Adaci-Cattiling, the president of OGPI noted the payment was the “first from the Didipio Mine this year, and the first ever from an FTAA holder in the country.”
The environment depart said OGPI's payment for AGS was on top of P979 million in excise taxes and P2.5 billion in other local taxes and fees that were all paid in 2023.
Per the mining firm, it would be paying local business taxes for 2024 in the amount of P421.8 million with the agreement of three municipalities in the provinces of Nueva Vizcaya and Quirino where Didipio Mine operates.
The DENR noted that OGPI is one of the five FTAAs in the Philippines.
Under the FTAA, which was renewed on July 14, 2021, the Philippine government and the mining corporation agreed to a 60-40 sharing agreement, with the government receiving 60 percent of net revenue and OGPI receiving the remaining 40 percent.
“The arrangement was guided by the principle that the government expected a reasonable return in economic value for harnessing non-renewable natural resources,” the agency said.
“OGPI could also expect a reasonable return on its investments given the high-risk exploration, development, terms and conditions prevailing locally and internationally in the industry,” it added.
According to the DENR, the FTAA, which gives a firm like OGPI the title, exploration, and mining rights within a set fiscal regime, deducts all taxes and fees paid to the government from the government's 60 percent share of net revenue to determine any AGS payable.
“The fiscal regime had been in place since the FTAA was executed on June 20, 1994 between the government and OGPI’s predecessor-in-interest. The constitutionality of the FTAA, including its fiscal regime, was upheld by the Supreme Court,” the agency stated.
The mining company has set aside P608.6 million for its 2024 projects and programs through its Social Development and Management Program Fund (for the host and ten neighboring barangays, as well as two municipalities), Community Development Fund (for communities in the greater Nueva Vizcaya and Quirino areas), and Provincial Development Fund.
Based on the data of the Philippine Statistics Authority, the mining sector contributed P170.10 billion to the country’s gross domestic product in terms of local production and exports in 2023.