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Local gov’t treasurers see P821m losses from closure, suspension of mining projects

February 20, 2017

An order of the Department of Environment and Natural Resources (DENR) to shut down or suspend the operations of 28 mine sites across the country will cost 17  affected cities and municipalities  in 10 provinces over P821 million annually  in foregone revenues, according to updated estimates submitted by local government treasurers to the Department of Finance (DOF).

Finance Secretary Carlos Dominguez III, who earlier directed local treasurers to submit their respective reports on revenue impact of the DENR closure and suspension orders on host local government units, said in a statement Monday three  municipalities will lose revenues representing over 50 percent of their operating income if affected mine sites are shut down or forced to suspend operations.

“One is the municipality of Carrascal (in Surigao del Sur), then you have Tagana-an (in Surigao del Norte) and Tubajon (in Dinagat Islands),” said Dominguez.

The updated estimates submitted by the Bureau of Local Government Finance to Dominguez show Carrascal will lose P198.3 million of mining revenues, which represent 62.3 percent of its total operating income.

Tagana-an will lose P70.3 million or 54 percent of its total operating income. Tubajon will shed P38 million, or 55.4 percent of its total operating income if the DENR order is implemented.

The Mining Industry Coordinating Council (MICC) co-chaired by the DOF and DENR met last Feb. 9 to discuss the closure and suspension orders, and issued a resolution emphasizing that due process will be observed in assessing the status of mining operations in the country..

A multi-stakeholder team was also formed by the MICC  to “review existing mining operations in consultation with the LGUs.”

The review shall be based on “the guidelines and parameters set forth in the specific mining contract and in other pertinent laws, taking into account the valid exercise of the State’s police power to serve the common good of the poor,” the MICC  resolution likewise read.

MICC's technical review team was set to hold its organizational meeting Monday

The latest estimates, an increase from the initial P653 million submitted by the BLGF,  is based on the 100 percent compliance to Dominguez’s directive of city and municipal treasurers in the affected local government unuits.

The bureau's estimates does not include projected income losses of local government units that host 75 mine sites whose mineral production sharing agreements were ordered cancelled by the DENR last week. DMS