With an estimated $1.4 trillion in reserves, Philippine mining potential ranks fifth in the world, covering an estimated 9 million hectares, but less than 2% has mining permits. After long stagnation, the sector has been coming back after a 2005 SC decision affirming RA 7942, considered a world-class legal framework for sustainable development. Minerals development is a government priority and has great potential for jobs and revenue. Government has identified over 60 priority PPP projects. Mining can support poor rural areas through high quality jobs, local tax payments, and community development. The national government receives substantial royalty and tax payments. Government revenue from mining increased 800% from 2002 to PhP10.4 billion in 2007. However, full development of the sector continues to face significant challenges. Lengthy, tedious approvals for Exploration Permits (EPs) continue to impede investment. Several LGUs have closed their provinces to mining. Industry is concerned that the Writ of Kalikasan might disturb lawful activities. An investor cannot tell easily if land is ancestral land. Skilled Mines and Geosciences Bureau (MGB) personnel often leave public service. EO 79 has imposed a moratorium on new mining permits, pending the passage of a new law on the revenue-sharing scheme between industry

1. PART 3: BIG WINNER SECTORS
MINING
RECOMMENDATIONS: 32
PROGRESS RATINGS RATINGS
IMPROVED 5 2 12
DECLINED 4 3 4
STEADY 22 11 0

2. BIG WINNER SECTORS
MINING
With an estimated $1.4 trillion in reserves, Philippine mining potential ranks
fifth in the world, covering an estimated 9 million hectares, but less than
2% has mining permits. After long stagnation, the sector has been coming
back after a 2005 SC decision affirming RA 7942, considered a world-class
legal framework for sustainable development. Minerals development is a
government priority and has great potential for jobs and revenue. Government
has identified over 60 priority PPP projects. Mining can support poor
rural areas through high quality jobs, local tax payments, and community
development. The national government receives substantial royalty and tax
payments. Government revenue from mining increased 800% from 2002 to
PhP10.4 billion in 2007. However, full development of the sector continues
to face significant challenges. Lengthy, tedious approvals for Exploration
Permits (EPs) continue to impede investment. Several LGUs have closed their
provinces to mining. Industry is concerned that the Writ of Kalikasan might
disturb lawful activities. An investor cannot tell easily if land is ancestral land.
Skilled Mines and Geosciences Bureau (MGB) personnel often leave public
service. EO 79 has imposed a moratorium on new mining permits, pending the
passage of a new law on the revenue-sharing scheme between industry and
government.
119

3. RECOMMENDATION 1
Promote the port of Batangas for CALABARZON-destined
shipments and Subic for Central Luzon-destined shipments.
RECOMMENDATION A
Invite international feeder vessel operators to call at Batangas and
Subic.
2012 RATING 2011 RATING
Not Ongoing Backward / Regression
While MGB has been quite active in this area, the result has created the situation where
numerous appeals are headed to the court system, which will cause more delay and keep
access to the ground inaccessible. The EITI may improve this in the future but current
moratorium continues.
RECOMMENDATION B
Applicants should be vetted strictly.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
RECOMMENDATION C
Reduce Environmental Clearance Certificate processing time and
certificates of non-coverage.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
RECOMMENDATION D
Allow pre-permitting access by firms to potential project lands. >>>
120 | PART 3: MINING

4. 2012 RATING 2011 RATING
Backward / Regression Not Ongoing
Temporary EPs have been stopped.
RECOMMENDATION E
Continue processing of mining applications involved in mining cases.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
RECOMMENDATION F
MGB should strictly monitor compliance by mining companies with
the Mining Act and related departmental orders. MGB should cancel
permits after two years of non-performance.
2012 RATING 2011 RATING
Started Started
Mineral Production Sharing Agreements and Financial or Technical Assistance Agreements are
regularly monitored, but small scale mining is not, unless provoked by incidents. EO 79 tries to
address this.
RECOMMENDATION 2
Establish regional level one-stop shops.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
ARANGKADA PHILIPPINES SECOND ANNIVERSARY ASSESSMENT | 121

5. RECOMMENDATION 3
Develop model best-practice regions.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
RECOMMENDATION 4
MGB should adopt the Philippine Mineral Ore Resources Reserve
Reporting Code.
2012 RATING 2011 RATING
Substantial Progress Substantial Progress
This is generally adopted, but enforcement by PSE needs strengthening.
RECOMMENDATION 5
Seek to end LGU mining moratoriums.
2012 RATING 2011 RATING
Backward / Regression Backward / Regression
The national government seems unwilling to tackle this important issue with firmness.
RECOMMENDATION 6
Implement the simplified joint circular regarding release of mining
taxes to LGUs.
2012 RATING 2011 RATING
Started Started
There have been various bills over time addressing this, but they seem to get to a point and
stop. HB 4410, which passed the House on Third Reading on May 16, 2011, promotes the direct
remittance of the 40% LGU share of national government collection. The Senate bill saw only
122 | PART 3: MINING

6. one hearing in 2012, and the chair decided to hold another which was rescheduled to the week
before recess in late January 2013. A joint circular was issued, but no one is tasked to monitor
how well it is working.
RECOMMENDATION 7
Continue dialogue to find common-ground solutions to issues being
raised against specific mining and exploration projects.
2012 RATING 2011 RATING
Started Started
There is substantial dialog, but little progress has resulted.
RECOMMENDATION 8
Industry should actively monitor developments in Congress and the
judiciary.
2012 RATING 2011 RATING
Started Substantial Progress
Industry has never been so active in monitoring, participating, and presenting position papers.
There is close coordination between the Chamber of Mines and the Philippine Mining and
Exploration Association.
RECOMMENDATION 9
Support revision of the 60-40 equity restriction provision in the
Constitution.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
The current administration was unwilling to address constitutional change of foreign equity
restrictions in 2012.
RECOMMENDATION 10
Continue implementation of the Minerals Action Plan; continue active
private sector participation in the Mineral Development Council
(MDC). >>>
ARANGKADA PHILIPPINES SECOND ANNIVERSARY ASSESSMENT | 123

7. 2012 RATING 2011 RATING
Backward / Regression No Longer Relevant
MDC was abolished. The Mining Industry Coordinating Council (MICC) established in EO 79
does not have industry representation.
RECOMMENDATION 11
GPH should work on four programs to industrialize: (1) promote
downstream processing and manufacturing for copper, nickel, gold,
and chromite; (2) develop community-based supplier industries and
services; (3) improve government benefits from mining; and (4) better
control exports of small scale mining and unprocessed minerals.
2012 RATING 2011 RATING
Started Started
DISTRIBUTION OF MANUFACTURING GVA BY SUBSECTOR, 2012
4.0 200%
3.0 150%
2.0 100%
1.0 50%
0.0 0%
-1.0 -50%
-2.0 -100%
97
98
20 9
0
20 7
12
95
93
92
20 4
20 1
10
90
9
11
20 8
20 5
91
94
20 3
20 2
96
6
0
0
0
0
9
0
0
0
0
0
0
20
20
19
20
20
19
19
19
19
19
20
19
19
19
19
124 | PART 3: MINING

8. EO 79 addresses some of these issues but overall, there has been no real progress to date.
RECOMMENDATION 12
Community building should commence from the first day.
2012 RATING 2011 RATING
Started Started
RECOMMENDATION 13
Mining firms should support labor intensive community-run enterprises.
2012 RATING 2011 RATING
Started Not Ongoing
Companies tend to focus on labor intensive projects by default.
RECOMMENDATION 14
Increase the allocation of direct mining and milling costs for
community development from 1% to 1.5%.
2012 RATING 2011 RATING
No Longer Relevant Started
EO 79 has superseded this review.
RECOMMENDATION 15
Private sector should help build the capacity of Indigenous Peoples.
2012 RATING 2011 RATING
Started Started
There are numerous organizations that work with Indigenous Peoples.
ARANGKADA PHILIPPINES SECOND ANNIVERSARY ASSESSMENT | 125

9. RECOMMENDATION 16
Increase the budget and technical capacity of the National Commission
on Indigenous Peoples (NCIP).
2012 RATING 2011 RATING
Backward / Regression Not Ongoing
The new guidelines for Free and Prior Informed Consent are unworkable and released with no
industry consultation.
RECOMMENDATION 17
When resettling people, find habitation as close as possible to their
traditional lands.
2012 RATING 2011 RATING
No Longer Relevant Backward / Regression
The World Bank has issued clear guidelines for this purpose.
RECOMMENDATION 18
Companies should not pay stipends or occupation fees to local
member of the New People’s Army (NPA).
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
Payments to NPA are illegal, but reportedly still exist. Companies continue to be victims of
attacks on equipment, apparently motivated by extortion cloaked in environmental rhetoric.
RECOMMENDATION 19
Private sector should work closely with the MDC committee and the
Armed Forces of the Philippines (AFP) to establish a joint mining
security protocol.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
MDC was abolished, but the need for coordination on local security issues remains.
126 | PART 3: MINING

10. RECOMMENDATION 20
Exploration companies should conduct security and social assessments
in their areas.
2012 RATING 2011 RATING
Started Started
Mining companies have internal procedures for security and social assessments. GPH has been
quite proactive protecting resource interest.
RECOMMENDATION 21
Mining industry should work closely with MGB.
2012 RATING 2011 RATING
Started Not Ongoing
As much as practical, this is the case. Unfortunately, industry is excluded from MICC.
RECOMMENDATION 22
Students following graduation who enter government service should
be assigned to work with a local exploration or mining company.
2012 RATING 2011 RATING
Not Ongoing Not Ongoing
RECOMMENDATION 23
Encourage more students to study subjects needed in the mining
community.
2012 RATING 2011 RATING
Substantial Progress Started
AusAID supported a scholarship program in its fourth year.
ARANGKADA PHILIPPINES SECOND ANNIVERSARY ASSESSMENT | 127

11. RECOMMENDATION 24
Encourage mergers of local mining companies and list more on PSE.
2012 RATING 2011 RATING
Started Started
PSE has been proactive and there are more mining firms listing. But the fact remains that it
is not simple to list on PSE, particularly by way of introduction. There have been numerous
changes of the rules over the last few years.
RECOMMENDATION 25
Carry out a public information campaign regarding mining and increase
dialogue with concerned groups.
2012 RATING 2011 RATING
Substantial Progress Substantial Progress
There have been significant campaigns carried out by the Chamber of Mines.
RECOMMENDATION 26
Support the Mining Museum project in Baguio to establish a museum to
educate Filipinos.
2012 RATING 2011 RATING
Substantial Progress Substantial Progress
There has been some progress, as demonstrated by the 2011 Baguio Mining Safety Conference
focus on the Mining Museum.
RECOMMENDATION 27
Endorse the Extractive Industries Transparency Initiative (EITI).
2012 RATING 2011 RATING
Substantial Progress Started
Industry has substantially endorsed EITI. GPH is seriously studying participation and support.
128 | PART 3: MINING