The newly signed law that aims to simplify the country’s mining fiscal regime will enable the Philippines to attract more foreign direct investments (FDIs), according to the European Chamber of Commerce of the Philippines (ECCP).

President Ferdinand “Bongbong” Marcos Jr. signed into law the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act on Thursday, Sept. 4, as part of the administration’s efforts to ensure an equitable share of mining revenues for the government.

Embodied under Republic Act (RA) No. 12253, the law is expected to generate as much as ₱6.3 billion worth of additional revenues from the mining industry, or around ₱25.06 billion by the end of Marcos’ term in 2028.

Beyond revenues, ECCP said the new legislation will create a stable and clear regulatory framework, which is a critical aspect to attract and retain investments.

“The chamber believes that this law will not only create a more predictable and equitable business and investment climate, but also provide the necessary certainty for businesses to plan and commit to long-term projects with a simplified and more rational tax system,” ECCP said in a statement.

“This legislation is set to foster sustainable economic growth and job creation across the country,” it added.

ECCP is confident that the new fiscal regime will unlock the full potential of the country’s mineral resources.

The law will likewise boost the country’s standing in the global mining industry, while ensuring that the environment remains the top priority, the chamber said.

Under the reformed fiscal regime, mines outside mineral reservations will face a five-tier royalty rate of one to five percent, while mines operating outside will be subject to a margin-based royalty.

The law also imposes additional taxes when a company’s profit margin exceeds 30 percent.

Under the ring-fencing rule, each mining contractor will now be recognized as a separate taxable entity, preventing the consolidation of income and expenses of all mining projects by the same taxpayer.

The regime will directly benefit local government units (LGUs) and research and development (R&D) initiatives.

Under RA 12253, 40 percent of collections from excise taxes, royalties, and other fees will go to LGUs. Meanwhile, 10 percent of royalties from mining sites will be allotted to the Mines and Geosciences Bureau (MGB) and the Metals Industry Research and Development Center (MIRDC) to build mineral valuation laboratories and facilities.

The Chamber of Mines of the Philippines (COMP) said that while higher taxes are inevitable, the new law provides predictability and consistency in the fiscal framework, critical for long-term planning and investment.

“This landmark legislation is a crucial step toward establishing a stable, transparent, and competitive fiscal environment for the Philippine mining industry,” the industry group said in a separate statement.

COMP said this aligns the Philippines with global mining jurisdictions, making the country an attractive destination for investors.

The law comes at a pivotal moment when the demand for critical minerals is increasing worldwide and the country is establishing itself as a reliable source for the global energy transition, it said.