Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
Second Regular Session 
HOUSE BILL NO. _______ 
____________________________________________________________________ 
Introduced by HON. GUS S. TAMBUNTING 
AN ACT ESTABLISHING THE FISCAL REGIME FOR THE MINING INDUSTRY 
EXPLANATORY NOTE 
The Philippines is the fifth most mineralized country in the world, with an estimated 
USD1 trillion in untapped reserves of copper, gold, nickel, zinc, and silver. 
Notwithstanding, its mineral wealth remains largely untapped. Furthermore, the overall 
contribution of metallic mining to our Gross Domestic Product is as small as less than 
half a percent on average in the last five years. Recent statistics from the Philippine 
Mines and Geosciences Bureau (MGB) indicate that there are only 49 operating 
metallic mines, employing around 196,000 workers. In the first semester of 2022, total 
exports of minerals amounted to almost USD3,851 billion, and the Philippine 
Department of Environment and Natural Resources (DENR) placed the gross 
production value for large-scale metallic mining at PHP101.1 billion. This means that 
the Philippine mining industry has not prospered, largely due to inconsistent regulatory 
policies. Therefore, there is a need to re-examine our policy towards mining.  
This bill seeks to optimally utilize our minerals by bridging the gaps in our current laws 
and regulations. A fiscal regime in our mining industry is imperative for a more equitable 
revenue-sharing between the industry and the government. A healthy and responsive 
fiscal regime shall strike a balance between protecting the environment, benefiting local 
communities, and supporting our socioeconomic agenda. 
The mining industry has the greatest potential to be a key driver in the Philippines’ 
economic recovery following the pandemic. A prosperous mining sector will also secure 
the country’s long-term growth. 
On behalf of the people of Parañaque City’s Second District, and for the common good 
of the Filipino people, the approval of the said measure is earnestly sought. 
REP. GUS S. TAMBUNTING 
2nd District, Parañaque City 
August 8, 2023
1:40 pm
8808


1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
Second Regular Session 
HOUSE BILL NO. _______ 
______________________________________________________________________ 
Introduced by HON. GUS S. TAMBUNTING 
______________________________________________________________________ 
AN ACT ESTABLISHING THE FISCAL REGIME FOR THE MINING INDUSTRY 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
CHAPTER I 
GENERAL PROVISIONS 
SECTION 1. Section 34(B) of the National Internal Revenue Code of 1997, as 
amended, is hereby amended to read as follows: 
“SEC. 34. Deductions from Gross Income. – x x x 
“(A) Expenses. – 
“x x x 
“(B) Interest. –  
“(1) x x x  
“(2) x x x 
“(3) x x x 
“(4) LIMITATION OF INTEREST EXPENSE DEDUCTIONS FOR MINING 
CONTRACTORS 
(A) IF A MINING CONTRACTOR HAS A DEBT-TO-EQUITY RATIO IN
EXCESS OF 3 TO 1 AT ANY TIME DURING A TAXABLE YEAR, A
DEDUCTION IS DISALLOWED AS A TAX-DEDUCTIBLE EXPENSE
FOR THE INTEREST PAID BY THE MINING CONTRACTOR
DURING THAT YEAR ON THAT PART OF THE DEBT THAT
EXCEEDS THE 3 TO 1 RATIO FOR THE PERIOD THE RATIO
WAS EXCEEDED.
8808


2 
(B) IF 
THE 
DEBT-TO-EQUITY 
RATIO 
OF 
A 
MINING 
CONTRACTOR EXCEEDS 3 TO 1 FOR AN INCOME YEAR, 
SUBSECTION (A) DOES NOT APPLY IF, AT ALL TIMES, 
DURING THE YEAR, THE AMOUNT OF THE DEBT OF THE 
MINING CONTRACTOR DOES NOT EXCEED THE ARM'S 
LENGTH DEBT AMOUNT.  
 
(C) 
FOR PURPOSES OF THIS SECTION, THE TERM –  
 
(1) ARM'S LENGTH DEBT AMOUNT SHALL MEAN THE 
AMOUNT OF DEBT THAT A BANK THAT IS NOT AN 
ASSOCIATE OF THE MINING CONTRACTOR WOULD BE 
PREPARED TO LEND TO THE MINING CONTRACTOR 
HAVING REGARD TO ALL THE CIRCUMSTANCES OF 
THE MINING CONTRACTOR  
(2) ASSOCIATE SHALL MEAN ANY OTHER PERSON WHO 
ACTS OR MAY ACT IN ACCORDANCE WITH THE 
DIRECTIONS, REQUESTS, SUGGESTIONS, OR WISHES 
OF THE FIRST-MENTIONED PERSON, AND THE FIRST- 
MENTIONED PERSON IS AN ASSOCIATE OF THE 
SECOND- MENTIONED PERSON  
(3) DEBT SHALL MEAN THE GREATEST AMOUNT, AT ANY 
TIME DURING AN INCOME YEAR, OF THE DEBT 
OBLIGATIONS OF THE MINING CONTRACTOR ON 
WHICH INTEREST IS PAYABLE AS DETERMINED 
ACCORDING 
TO 
INTERNATIONAL 
FINANCIAL 
REPORTING STANDARDS  
(4) DEBT OBLIGATION SHALL MEAN AN OBLIGATION TO 
MAKE A REPAYMENT OF MONEY TO ANOTHER 
PERSON, INCLUDING AN OBLIGATION ARISING UNDER 
A PROMISSORY NOTE, BILL OF EXCHANGE, OR BOND, 
BUT NOT INCLUDING ACCOUNTS PAYABLE OR AN 
OBLIGATION TO MAKE REPAYMENT OF MONEY IN 
RESPECT OF WHICH NO INTEREST IS PAYABLE  
(5) EQUITY SHALL MEAN THE GREATEST AMOUNT, AT ANY 
TIME DURING AN INCOME YEAR, OF THE EQUITY OF 
THE 
MINING 
CONTRACTOR 
AS 
DETERMINED 
ACCORDING 
TO 
INTERNATIONAL 
FINANCIAL 
REPORTING 
STANDARDS 
AND 
INCLUDES 
AN 
OBLIGATION TO MAKE A REPAYMENT OF MONEY IN 
RESPECT OF WHICH NO INTEREST IS PAYABLE  
 


3 
“(C) Taxes. –  
“x x x 
“(D) Losses. –  
“x x x 
“(E) Bad Debts. –  
“x x x 
“(F) Depreciation. –  
“x x x 
“(G) Depletion of Oil and Gas Wells and Mines. –  
“x x x 
“(H) Charitable and Other Contributions. –  
“x x x 
“(I) Research and Development. –  
“x x x 
“(J) Pension Trusts. – x x x 
“(K) Additional Requirements for Deductibility of Certain Payments. – x x 
x 
“(L) Optional Standard Deduction. – x x x  
 
 
SEC. 2. This chapter title of Chapter VII, Title VI of the National Internal Revenue 
Code of 1997 (NIRC), as amended, is hereby amended to read as follows: 
 
 
“CHAPTER VII – [EXCISE TAX ON MINERAL PRODUCTS] TAXATION OF 
MINERAL PRODUCTS”. 
 
 
SEC. 3. The section title of Section 151, Chapter VII, Title VI of the National 
Internal Revenue Code of 1997, as amended, is hereby amended to read as follows:  
 
 
“SEC. 151. TAX ON Mineral Products. –  
 
 
SEC. 4. A new section shall be inserted as Section 151-A of the National Internal 
Revenue Code of 1997 (NIRC), as amended, to read as follows: 
 
“SEC. 151-A. ROYALTY 
(A) FOR 
LARGE-SCALE 
METALLIC 
MINING 
OPERATIONS 
WITHIN 
MINERAL RESERVATIONS. – MINING CONTRACTORS OF LARGE-
SCALE 
METALLIC 
MINING 
OPERATIONS 
WITHIN 
MINERAL 
RESERVATIONS SHALL PAY TO THE GOVERNMENT A ROYALTY 
EQUIVALENT TO THREE PERCENT (3%) OF THE GROSS OUTPUT OF 
THE 
MINERALS 
OR 
MINERAL 
PRODUCTS 
EXTRACTED 
OR 
PRODUCED BY THE MINING OPERATIONS, EXCLUSIVE OF ALL 
OTHER TAXES;  
 


4 
(B) FOR LARGE-SCALE METALLIC MINING OPERATIONS OUTSIDE OF 
MINERAL RESERVATIONS. – MINING CONTRACTORS OF LARGE-
SCALE METALLIC MINING OPERATIONS OUTSIDE OF MINERAL 
RESERVATIONS SHALL PAY TO THE GOVERNMENT A MARGIN-
BASED ROYALTY ON INCOME FROM MINING OPERATIONS IN 
ACCORDANCE WITH THE FOLLOWING TABLE:  
 
MARGIN 
ROYALTY 
1% UP TO 10% 
1.00% 
ABOVE 10% UP TO 20% 
1.50% 
ABOVE 20% UP TO 30% 
2.00% 
ABOVE 30% UP TO 40% 
2.50% 
ABOVE 40% UP TO 50% 
3.00% 
ABOVE 50% UP TO 60% 
3.50% 
ABOVE 60% UP TO 70% 
4.00% 
ABOVE 70% 
5.00% 
 
(C) FOR 
SMALL-SCALE 
METALLIC 
MINING 
OPERATIONS. 
– 
MINING 
CONTRACTORS OF SMALL-SCALE METALLIC MINING OPERATIONS SHALL 
PAY TO THE GOVERNMENT A ROYALTY EQUIVALENT TO ONE- TENTH 
(1/10) OF ONE PERCENT (1%) OF GROSS OUTPUT;  
 
(D) FOR PURPOSES OF THIS SECTION, THE TERM –  
(1) MARGIN SHALL MEAN THE RATIO OF INCOME FROM MINING 
OPERATIONS BEFORE CORPORATE INCOME TAX TO GROSS OUTPUT.  
(2) INCOME FROM MINING OPERATIONS SHALL MEAN THE GROSS OUTPUT 
LESS DEDUCTIBLE EXPENSES WHICH INCLUDES:  
(a) MINING, 
MILLING, 
TRANSPORT 
AND 
HANDLING 
EXPENSES 
TOGETHER WITH SMELTING AND REFINING COSTS OTHER THAN 
SMELTING AND REFINING COSTS PAID TO THIRD PARTIES;  
(b) GENERAL AND ADMINISTRATIVE EXPENSES ACTUALLY INCURRED 
BY THE MINING CONTRACTOR IN THE PHILIPPINES;  
(c) ENVIRONMENTAL EXPENSES OF THE MINING CONTRACTOR, 
INCLUDING SUCH EXPENSES NEC ESSARY TO FULLY COMPLY WITH 
ITS ENVIRONMENTAL OBLIGATIONS AS STIPULATED IN THE 
ENVIRONMENTAL PROTECTION PROVISION OF THE MINERAL 
AGREEMENT 
OR 
FINANCIAL 
OR 
TECHNICAL 
ASSISTANCE 
AGREEMENT AND IN THE APPLICABLE IMPLEMENTING RULES AND 
REGULATIONS;  
(d) EXPENSES FOR THE DEVELOPMENT OF HOST AND NEIGHBORING 
COMMUNITIES AND FOR THE DEVELOPMENT OF GEOSCIENCES 
AND MINING TECHNOLOGY, INCLUDING TRAINING COSTS AND 
EXPENSES AS STIPULATED IN THE MINERAL AGREEMENT, OR 


5 
FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT, AND IN 
THE APPLICABLE IMPLEMENTING RULES AND REGULATIONS;  
(e) ROYALTY PAYMENTS TO CLAIM OWNERS OR SURFACE LAND 
OWNERS RELATING TO THE CONTRACT AREA DURING THE 
OPERATING PERIOD, IF ANY;  
(f) ONTINUING EXPLORATION AND DEVELOPMENT EXPENSES WITHIN 
THE CONTRACT AREA AFTER THE PRE- OPERATING PERIOD;  
(g) INTEREST EXPENSES CHARGED ON LOANS OR SUCH OTHER 
FINANCING-RELATED EXPENSES INCURRED BY THE MINING 
CONTRACTOR SUBJECT TO THE FINANCING REQUIREMENT IN THE 
MINERAL AGREEMENT OR FINANCIAL OR TECHNICAL ASSISTANCE 
AGREEMENT, WHICH SHALL NOT BE MORE THAN THE PREVAILING 
INTERNATIONAL RATES CHARGED FOR SIMILAR TYPES OF 
TRANSACTIONS AT THE TIME THE FINANCING WAS ARRANGED, 
AND WHERE SUCH LOANS ARE NECESSARY FOR THE OPERATION;  
(h) DEPRECIATION, DEPLETION, AND AMORTIZATION;  
(i) TAXES, DUTIES, FEES, AND CHARGES;  
(j) ALL OTHER COSTS AND EXPENSES RELATED TO MINING 
OPERATIONS AND SALE OF MINERALS AND MINERAL PRODUCTS.  
(3) MINING CONTRACTOR SHALL MEAN A QUALIFIED PERSON ACTING 
ALONE OR IN CONSORTIUM WHO IS A PARTY TO A MINERAL 
AGREEMENT 
OR 
FINANCIAL 
AND 
TECHNICAL 
ASSISTANCE 
AGREEMENT.”  
 
SEC. 5. A new section shall be inserted as Section 151-B of the National Internal 
Revenue Code of 1997 (NIRC), as amended, to read as follows: 
“SEC. 151-B. WINDFALL PROFITS TAX –  
 
IN ADDITION TO THE TAXES IMPOSED UNDER THIS CODE, THERE IS HEREBY 
IMPOSED FOR EACH TAXABLE YEAR A AMRGIN-BASED WINDFALL PROFITS TAX 
ON INCOME FROM MINING OPERATIONS BEFORE CORPORATE INCOME TAX, IN 
ACCORDANCE WITH THE FOLLOWING TABLE: PROVIDED, THAT IT SHALL BE 
DEDUCTIBLE FROM TAXABLE INCOME, AS DEFINED IN SECTION 31, CHAPTER V, 
TITLE II, OF THIS CODE:  
 
MARGIN 
RATE 
MORE THAN 35% UP TO 40% 
1% 
MORE THAN 40% UP TO 45% 
2% 
MORE THAN 45% UP TO 50% 
3% 
MORE THAN 50% UP TO 55% 
4% 
MORE THAN 55% UP TO 60% 
5% 
MORE THAN 60% UP TO 65% 
6% 
MORE THAN 65% UP TO 70% 
7% 
MORE THAN 70% UP TO 75% 
8% 
MORE THAN 75% UP TO 80% 
9% 


6 
MORE THAN 80% 
10% 
SEC. 6. Each Mining Operation Treated as a Separate Taxable Entity. – Each 
mining operation, which is subject to a Mineral Agreement or Financial or Technical 
Assistance Agreement, shall be treated as a separate taxpayer with respect to each 
other and every Mineral Agreement of Financial or Technical Assistance Agreement 
it holds or is a party to. If a Mineral Agreement or Financial or Technical Assistance 
Agreement is renewed, the renewal shall be treated as part of the original agreement.  
 
SEC. 7. Exemption from Confidentiality Clauses. – Mining contractors for all 
metallic and nonmetallic mining operations, whether large-scale or small-scale, shall 
observe fiscal transparency and comply with the requirements of the Extractive 
Industries Transparency Initiative (EITI) of government, and, for this purpose, shall 
be exempted from application of the confidentiality clauses of the National Internal 
Revenue Code of 1997, as amended, including Section 270 in relation to Section 71 
therein, to the extent of their participation in the EITI.  
 
SEC. 8. Fiscal Regime Under Financial or Technical Assistance 
Agreements and Other Mineral Agreements. – The fiscal regime provided herein 
and the applicable terms and conditions provided under existing laws shall be 
embodied in the Mineral Agreements and Financial or Technical Assistance 
Agreements entered into by the government.  
 
SEC. 9. Vested Rights. – A valid mineral agreement and technical assistance 
agreement existing prior to the effectivity of this Act shall continue to be governed by 
its terms and conditions, except if these provide that terms and conditions resulting 
from repeal or amendment of existing laws or regulations or from the enactment of a 
new law or regulation shall be considered a part of said financial and technical 
assistance agreement and mineral agreement.  
 
SEC. 10. Registration of Small-scale Miners for Taxation Purposes. – All 
persons engaged in small-scale mining activities shall register with the Mines and 
Geosciences Bureau (MGB) and with the Mining Board of the concerned local 
government unit in accordance with Republic Act No. 7076 or the “People’s Small-
Scale Mining Act of 1991,” and may organize themselves into cooperatives in order 
to qualify for the awarding of a people’s small-scale mining contract.  
 
The Mining Board shall submit an annual report to the MGB of all the small-scale 
mining contracts entered into for the small-scale utilization of a plot of mineral land 
including the respective production output, taxes and fees paid.  
 
For this purpose, a tax identification number shall be required for registration 
and secured from the Bureau of Internal Revenue.  


7 
 
SEC. 11. Disposition of Royalties for the Natural Resource Trust Fund. – 
The provisions of existing laws to the contrary notwithstanding, the revenues 
collected from the margin-based royalty paid by the large-scale metallic mining 
operations outside of mineral reservations shall accrue to the Natural Resource Trust 
Fund under this Act. The Bureau of Treasury shall create a Special Account on said 
revenues and shall serve as its fund manager.  
 
The Natural Resource Trust Fund shall be remitted to the Bureau of Treasury 
within the first quarter of the succeeding income year. The fund shall redound to the 
benefit of provinces, cities, municipalities, and barangays directly affected by mining 
operations which shall commence three (3) years after the effectivity of this Act, and 
every six (6) years thereafter.  
 
The Natural Resource Trust Fund shall be used by the local government unit 
concerned to support educational programs, technological research programs of local 
relevance, disaster risk management, rehabilitation of abandoned mines before the 
enactment of Republic Act No. 7942 of the “Philippine Mining Act of 1995,” and health 
service programs of the communities directly affected by mining activities: Provided, 
That the Department of Budget and Management, in consultation with the 
Department of Environment and Natural Resources and the Department of Finance, 
shall issue rules and regulations governing the allocation and disbursement of the 
fund allocated to provinces, cities, municipalities, and barangays not later than one 
hundred and eighty (180) days from the effectivity of this Act.  
 
SEC. 12. Implementing Rules and Regulations. – The Department of Finance, 
after consultation with other concerned government agencies, shall, within ninety (90) 
days from the effectivity of this Act, promulgate rules and regulations to implement 
the intent and provisions of this Act.  
 
 
SEC 13. Repealing Clause. –  
(a) The second paragraph of Section 5 of Republic Act No. 7942, otherwise 
known as the Philippine Mining Act of 1995 is hereby amended to assign the 
Bureau of Internal Revenue as the collecting agent of the payment of 
royalty. 
(b) Section 13 of Department of Environment and Natural Resources 
Administrative Order No. 2010-21 is hereby amended insofar as it governs 
the payment of 5% royalty to the Mines and Geosciences Bureau by a 
contractor/permit holder/lessee operating within a mineral reservation.  
(c) All laws, acts, decrees, executive orders, rules and regulations, or parts 
thereof which are contrary to or inconsistent with this Act are hereby 
repealed, amended or modified accordingly.  


8 
 
SEC. 14. Separability Clause. – If any provision of this Act is declared 
unconstitutional or invalid, other parts or provisions hereof not affected thereby shall 
continue to be in full force and effect.  
 
SEC. 15. Effectivity. – This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation.  
 
Approved,