Local treasurers estimate foregone annual revenue from mine slosure, suspension over P650-M

February 8, 2017

A directive 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 affected local government units in 10 provinces over P650 million yearly in foregone revenues, an initial estimate from the Department of Finance (DOF) said Wednesday.

In a preliminary report to Finance Secretary Carlos Dominguez III, the Bureau of Local Government Finance said  losses such as taxes, fees and other charges directly collected by the local governments from mining firms are estimated at P441.92 million.

The local government units’ share from mining taxes collected by the national government account for another P211.72 million.

“The total estimated potential revenue loss of the affected LGUs from all sources, based on 2015 data, amount to P653.64 million,” the bureau’s executive director Nino Alvina said in his preliminary report to Dominguez.

The BLGF said the provinces affected by closure or suspension order are Benguet, Nueva Vizcaya, Palawan, Cebu, Bulacan, Zambales, Eastern Samar, Dinagat Islands, Surigao Del Norte, and Surigao Del Sur.

Alvina said the bureau based its initial report to Dominguez on 2015 data because reports for 2016 will come in by the end of March 31..

He said the bureau got its data from preliminary estimates of local treasurers and their electronically submitted Statements of Receipts and Expenditures that cover reports on earnings from mining and other extractive industries.

The preliminary reports would still have to be reviewed because some local government units are hosting two to five mining projects, Alvina said.

Dominguez last week instructed city and municipal treasurers in areas hosting mine sites to submit their respective reports on the  final and complete revenue impact of the DENR directive by the end of this work week or by Feb. 10.

Dominguez had asked for the impact assessment reports because alongside the loss of jobs and its effect on the national economy, the DENR’s move  might imperil the fiscal state of the affected local government units, given that mining companies account for a hefty part of the tax revenues collected by local governments in municipalities hosting mine sites.

The finance secretary said last weekend these reports will help the government in coming up with a comprehensive strategy to address the impact of the DENR move on the employment and fiscal situations in the communities where concerned mining sites are located.

Dominguez said he has called for a meeting of the Mining Industry Coordinating Council (MICC), which he co-chairs, to assess the impact of the DENR directive.

“We’re just waiting for the response of the other members of the MICC. So we want to have it next week as soon as possible,” Dominguez said in last week's chance interview. DMS