NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Third Regular Session
)
SENATE 
S. No.2326
24 SEP 17 P1 -O?
RtCtsi-Di.':
Introduced by Senator Joseph Victor G. Ejercito
AN ACT
ENHANCING THE FISCAL REGIME FOR THE LARGE-SCALE METALLIC 
MINING INDUSTRY AMENDING FOR THE PURPOSE SECTIONS 34(B), 
130(D), 287, AND THE SUBJECTS OF TITLE VI AND CHAPTER VII THEREOF, 
AND CREATING NEW SECTIONS 151-A, 151-B, 151-C, 151-D, AND 287-A, 
ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, 
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
The Philippines is richly endowed with mineral resources that have the 
potential to propel the country's economic growth and development. However, such 
potential has not been realized, considering the mining sector's small contribution to 
the gross domestic product (GDP), as well as the general perception that mining, 
with all its negative externalities, does not really redound to the benefit of the 
nation. This bill aims to harness the full potential of the country's mineral resources 
by reforming how the government derives revenues from and secures the State's fair 
share in the development and utilization of these resources. Specifically, this bill 
seeks to rationalize the taxation of the large-scale metallic mining industry towards 
evolving a fiscal regime that is fairer, simpler, more competitive, and sustainable.
Based mainly on Republic Act No. 7942, or the "Philippine Mining Act of 
1995", the existing fiscal regime governing the mining sector in the Philippines has 
been in place for several decades now. This current system is quite complicated, 
providing for differential tax treatment depending on the kind of license or 
agreement the mining operations are under and whether or not it is within a mineral


reservation or ancestral land, among others. To address this complexity and promote 
fairness, this bill proposes to amend the National Internal Revenue Code to provide a 
simplified single fiscal regime applicable to all large-scale metallic mining, which is 
designed to meet the objective of increasing the government's share without 
compromising the mining sector's need for a reasonable return on investment.
The bill seeks to:
(1) levy royalties on all mining operations whether inside or outside mineral 
reservations as well as a windfall profits tax to capture extraordinary gains 
from high commodity prices;
(2) consolidate the tax treatment of mining operations under a Mineral 
Production Sharing Agreement (MPSA) and of those under Financial and 
Technical Assistance Agreement (FTAA), creating a single tax structure 
applicable to both types of mining contracts;
(3) introduce a provision that restricts thin capitalization by setting a 
maximum debt-to-equity ratio for the tax deductibility of interest expense, 
and ring fencing, where each mining operation of a mining 
contractor/operator with multiple operations will be treated as a separate 
taxable entity;
(4) institutionalize a mechanism for public disclosure and scrutiny of extractive 
industry-related data and information to help ensure the open and 
accountable governance of the country's mineral resources, pursuant to 
international standards and best prctices.
This bill represents a critical step in reforming the Philippine mining sector to 
ensure that our country's mineral wealth is harnessed responsibly and equitably for 
the benefit of presnt and future generations, striking a balance between increasing 
government revenues consistent with State ownership of mineral resources and 
maintaining competitiveness, attractiveness, and sustainability of the mining 
industry.
In light of the foregoing, the passage of this bill is earnestly sought.
V
^6='
JOSEPH VICTOR G. EJERCITO


■rir:r
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Third Regular Session
)
SENATE 
s. no.2828
24 SEP 1? PI -O?
RECEiVifO&..___
Introduced by Senator Joseph Victor G. Ejercito
AN ACT
ENHANCING THE FISCAL REGIME FOR THE LARGE-SCALE METALLIC 
MINING INDUSTRY AMENDING FOR THE PURPOSE SECTIONS 34(B), 
130(D), 287, AND THE SUBJECTS OF TITLE VI AND CHAPTER VII THEREOF, 
AND CREATING NEW SECTIONS 151-A, 151-B, 151-C, 151-D, AND 287-A, 
ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, 
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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SECTION 1. Title. —This Act shall be known as the "Enhanced Fiscal Regime
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for Large-Scaie Metallic Mining Act".
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SEC. 2. Declaration of Policy. - AN minerai resources within the territory
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and exclusive economic zone of the Republic of the Phiiippines are owned by the
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State. As the owner, the State shali exercise fuil control and supervision over the
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exploration, development, and utilization of these resources, and shall receive its fair
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share in the incomes therefrom.
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In harnessing minerai resources to contribute to the country's economic growth
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and general welfare, the State recognizes the indispensable roles of the private


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sector and civil society and shall encourage participation through transparency and
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public accountability.
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In recognizing the indispensable role of the private sector, the State iikewise
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encourages private enterprise and investments. Thus, the State guarantees the legai
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stability of agreements entered into by the government with metallic mining
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investors as contractors of the State, including the continued applicability of the tax
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regime in force at the time of the execution of these contracts for the duration of
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their validity.
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SEC. 3. Scope of Application. - This Act shall apply to all large-scale
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metallic mining operations in the Philippines, as defined herein.
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SEC. 4. Section 34(B) of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as foliows:
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"SEC. 34. Deductions from Gross Income, -x x x
(A) Expenses. -
XXX
(B) Interest -
(1) General, -x x x
(2) Exceptions, -x x x
(a) XXX
(b) X X x;
(c) X X x[t]; or
(D) FOR METALLIC MINING CONTRACTORS OR OPERATORS, 
WHERE THE INTEREST INCURRED ON RELATED-PARTY DEBTS IS 
IN EXCESS OF THE ALLOWABLE INTEREST ON SUCH DEBTS,


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WHICH ALLOWABLE INTEREST IS BASED ON A QUARTERLY 
RELATED-PARTY DEBT-TO-EQUITY RATIO OF 2 TO 1 AT ANY 
TIME DURING A GIVEN TAXABLE YEAR.
FOR PURPOSES OF THIS SUBSECTION, THE TERM:
(I) 
DEBT SHALL MEAN THE GREATEST AMOUNT, AT ANY 
TIME DURING A TAXABLE YEAR, OF THE RELATED-PARTY DEBT 
OBLIGATIONS OF THE METALLIC MINING CONTRACTOR OR 
OPERATOR, ON WHICH INTEREST IS PAYABLE AS DETERMINED 
ACCORDING TO INTERNATIONAL FINANCIAL REPORTING 
STANDARDS;
(II) EQUITY SHALL MEAN THE GREATEST AMOUNT, AT ANY 
TIME DURING A TAXABLE YEAR, OF THE EQUITY OF THE 
METALLIC MINING CONTRACTOR OR OPERATOR, AS 
DETERMINED ACCORDING TO INTERNATIONAL FINANCIAL 
REPORTING STANDARDS, INCLUDING AN OBLIGATION TO MAKE 
A REPAYMENT OF MONEY IN RESPECT OF WHICH NO INTEREST 
IS PAYABLE;
(III) METALLIC MINING CONTRACTOR SHALL MEAN A 
QUALIFIED PERSON, ACTING ALONE OR IN A CONSORTIUM, 
WHO IS A PARTY TO ANY MINERAL AGREEMENT OR FINANCIAL 
OR TECHNICAL ASSISTANCE AGREEMENT ON METALLIC 
MINERAL PRODUCTION AS DEFINED UNDER REPUBLIC ACT NO. 
7942 OR THE PHILIPPINE MINING ACT OF 1995; AND


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(IV) METALLIC MINING OPERA TOR SHALL MEAN AN ENTITY 
COMMISSIONED BY THE METALLIC MINING CONTRACTOR TO 
CONDUCT MINING OPERATIONS WITHIN THE MINERAL 
AGREEMENT OR FINANCIAL OR TECHNICAL ASSISTANCE 
AGREEMENT AREA BY VIRTUE OF THEIR VALIDLY EXECUTED 
OPERATING AGREEMENT, MEMORANDUM OF AGREEMENT, OR 
OTHER SIMILAR FORMS OF AGREEMENT, WHEREIN SUCH 
CONDUCT OF MINING OPERATIONS IS DULY APPROVED BY THE 
MINES AND GEOSCIENCES BUREAU.
(3) Optional Treatment of Interest Expense, -x x x 
X X x"
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SEC. 5. The subjects of Title VI and Chapter VII thereof of the National
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Internal Revenue Code of 1997, as amended are hereby amended to read as
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follows:
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TITLE VI - EXCISE TAXES AND OTHER IMPOSITIONS ON CERTAIN GOODS
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AND SERVICES
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XXX XXX XXX
CHAPTER VII - EXCISE TAX AND OTHER IMPOSITIONS ON MINERALS AND
MINERAL PRODUCTS
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SEC. 6. A new section designated as Section 151-A under Chapter VII, Title VI
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of the National Internal Revenue Code of 1997, as amended, is hereby inserted, and
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shall read as follows:
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'SEC. 151-A. ROYALTY.-


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(A) ROYALTY RATE FOR LARGE-SCALE METALLIC MINING 
OPERATIONS. - THERE SHALL BE LEVIED ON LARGE-SCALE 
METALLIC MINING OPERATIONS, WHICH IS DEFINED AS THE 
EXPLORATION, DEVELOPMENT, AND UTILIZATION OF METALLIC 
MINERALS UNDER A MINERAL AGREEMENT OR FINANCIAL OR 
TECHNICAL ASSISTANCE AGREEMENT, AS SUCH AGREEMENTS 
ARE DEFINED UNDER REPUBLIC ACT NO. 7942 OR THE 
PHILIPPINE MINING ACT OF 1995, ROYALTY BASED ON THE 
FOLLOWING RATES:
(1) OPERATIONS WITHIN MINERAL RESERVATIONS. - LARGE- 
SCALE METALLIC MINING OPERATIONS WITHIN MINERAL 
RESERVATIONS, AS DEFINED IN REPUBLIC ACT NO. 7942 
OR THE PHILIPPINE MINING ACT OF 1995, SHALL BE 
SUBJECT TO A ROYALTY OF FIVE PERCENT (5%) OF THE 
GROSS OUTPUT OF THE MINERALS OR MINERAL PRODUCTS 
EXTRACTED OR PRODUCED.
(2) OPERA TIONS OUTSIDE MINERAL RESERVA TIONS. - LARGE- 
SCALE METALLIC MINING OPERATIONS OUTSIDE MINERAL 
RESERVATIONS SHALL BE SUBJECT TO A MARGIN-BASED 
ROYALTY ON INCOME FROM METALLIC MINING 
OPERATIONS, BASED ON THE FOLLOWING RATES:
MARGIN 
RATE
OVER 0% BUT NOT OVER 15%
OVER 15% BUT NOT OVER 30%
1.0%
2.0%


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OVER 30% BUT NOT OVER 45%
OVER 45% BUT NOT OVER 60%
OVER 60%
3.0%
4.0%
5.0%
PROVIDED, THAT IF THE MARGIN OF LARGE-SCALE 
METALLIC MINING OPERATIONS OUTSIDE MINERAL 
RESERVATIONS IS LESS THAN OR EQUAL TO ZERO PERCENT 
(0%), A MINIMUM ROYALTY OF ONE-TENTH (1/10) OF ONE 
PERCENT (1%) OF THE GROSS OUTPUT OF THE MINERALS 
OR MINERAL PRODUCTS EXTRACTED OR PRODUCED SHALL 
BE IMPOSED.
(B) FOR PURPOSES OF THIS SECTION, THE TERM:
(1) GROSS OUTPUT SHALL MEAN THE GROSS OUTPUT AS 
DEFINED IN SECTION 151 (B)(1) OF THIS CODE;
(2) INCOME FROM METALLIC MINING OPERATIONS SHALL MEAN
THE GROSS OUTPUT LESS DEDUCTIONS DIRECTLY 
ATTRIBUTABLE TO MINING OPERATIONS WHICH INCLUDE:
(A) MINING, MILLING, TRANSPORTING, AND HANDLING 
EXPENSES TOGETHER WITH SMELTING AND REFINING 
COSTS INCURRED;
(B) GENERAL AND ADMINISTRATIVE EXPENSES ACTUALLY 
INCURRED BY THE METALLIC MINING CONTRACTDOR 
OR OPERATOR;
(C) ENVIRONMENTAL EXPENSES OF THE METALLIC MINING 
CONTRACTOR OR OPERATOR, INCLUDING SUCH


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EXPENSES NECESSARY 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 FINANCIAL OR TECHNICAL 
ASSISTANCE AGREEMENT AND IN THE APPLICABLE 
IMPLEMENTING RULES AND REGULATIONS;
(E) LEASE AND ROYALTY PAYMENTS TO CLAIM OWNERS OR 
SURFACE LANDOWNERS RELATING TO THE CONTRACT 
AREA DURING THE OPERATING PERIOD, IF ANY;
(F) CONTINUING EXPLORATION AND DEVELOPMENT 
EXPENSES WITHIN THE CONTRACT AREA AFTER THE 
PRE-OPERATING PERIOD;
(G) INTEREST EXPENSES CHARGED ON LOANS, SUBJECT TO 
SECTTON 34(B)(2)(D) OF THIS CODE, OR SUCH OTHER 
FINANCING-RELATED EXPENSES INCURRED BY THE


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METALLIC MINING CONTRACTOR OR OPERATOR 
SUBJECT TO FINANCING REQUIREMENTS IN THE 
RELEVANT MINERAL AGREEMENT OR FINANCIAL OR 
TECHNICAL ASSISTANCE AGREEMENT, WHICH SHALL 
NOT BE MORE THAN WHAT IS APPLICABLE FOR ARM'S 
LENGTH TRANSACTIONS AT THE TIME THE FINANCING 
WAS ARRANGED, AND WHERE SUCH LOANS ARE 
NECESSARY FOR ITS OPERATIONS;
(H) DEPRECIATION, DEPLETION, AND AMORTIZATION; AND
(I) DUTIES, FEES, CHARGES, AND TAXES, EXCLUDING 
ROYALTY, AS PROVIDED IN THIS SECTION, WINDFALL 
PROFIT TAX, AS PROVIDED IN SECTION 151-B AND 
SUBJECT TO THE LIMITATIONS UNDER SECTION 34(C) 
OF THIS CODE.
(3) MARGIN SHALL MEAN THE RATIO OF INCOME FROM 
METALLIC MINING OPERATIONS TO GROSS OUTPUT.
(C) QUARTERLY RETURNS, PAYMENT, BOND; FINAL
ADJUSTMENT. -
(1) FOR LOCALLY PRODUCED OR EXTRACTED METALLIC 
MINERAL OR MINERAL PRODUCTS FROM INSIDE AND 
OUTSIDE MINERAL RESERVATIONS, THE MINING 
CONTRACTOR OR OPERATOR SHALL FILE A RETURN AND 
PAY THE ROYALTY WITHIN SIXTY (60) DAYS AFTER THE 
END OF THE CALENDAR QUARTER WHEN SUCH PRODUCTS


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WERE REMOVED, SUBJECT TO SUCH CONDITIONS AS MAY 
BE PRESCRIBED BY RULES AND REGULATIONS TO BE 
PROMULGATED BY THE SECRETARY OF FINANCE, UPON 
RECOMMENDATION OF THE COMMISSIONER. FOR THIS 
PURPOSE, THE MINING CONTRACTOR OR OPERATOR SHALL 
FILE A BOND IN AN AMOUNT THAT APPROXIMATES THE 
AMOUNT OF ROYALTY DUE ON THE REMOVALS FOR THE 
SAID QUARTER, SUBJECT TO THE FILING OF A FINAL 
ROYALTY ADJUSTMENT RETURN COVERING THE TOTAL 
ROYALTY DUE FOR THE PRECEDING CALENDAR OR FISCAL 
YEAR. IF THE SUM OF THE QUARTERLY ROYALTY PAYMENTS 
MADE DURING THE SAID TAXABLE YEAR IS NOT EQUAL TO 
THE TOTAL ROYALTY DUE ON THE ENTIRE YEAR, THE 
MINING CONTRACTOR OR OPERATOR SHALL EITHER:
(A) PAY THE BALANCE OF ROYALTY STILL DUE; OR
(B) CARRY-OVER THE EXCESS CREDIT.
(2) THE ROYALTY RETURN SHALL BE EITHER ELECTRONICALLY 
OR MANUALLY FILED WITH AND THE TAX PAID TO THE 
BUREAU OF INTERNAL REVENUE THROUGH ANY REVENUE 
DISTRICT OFFICE THROUGH THE REVENUE COLLECTION 
OFFICER, AUTHORIZED AGENT BANK, OR AUTHORIZED TAX 
SOFTWARE PROVIDER, EXCEPT AS THE COMMISSIONER 
OTHERWISE PERMITS."


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(D) NON-REFUNDABILTTY AND NON-CREDITABILITY OF
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ROYALTY. - ROYALTY ON MINERAL PRODUCTS SHALL NOT BE
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CREDITABLE NOR REFUNDABLE EVEN IF THE MINERAL
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PRODUCTS ARE ACTUALLY EXPORTED.
(E) COLLECTION OF ROYALTIES FROM MINING OPERATIONS. - 
ANY PROVISION OF LAW TO THE CONTRARY 
NOTWITHSTANDING, PAYMENT OF THE ROYALTY DUE FROM 
MINING OPERATIONS UNDER THIS SECTION AND OTHER 
ROYALTIES SUBJECT TO THE SHARE ACCRUING TO THE MINES 
AND GEOSCIENCES BUREAU UNDER SECTION 5 OF REPUBLIC
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ACT NO. 7942 OR THE PHILIPPINE MINING ACT OF 1995, SHALL
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BE COLLECTED BY THE BUREAU OF INTERNAL REVENUE.
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SEC. 7. A new section designated as Section 151-B under Chapter VII, Title VI
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of the National Internal Revenue Code of 1997, as amended, is hereby inserted, and
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shall read as follows:
"SEC. 151-B. WINDFALL PROFIT TAX. -
(A) WINDFALL PROFIT TAX RA TES FOR LARGE-SCALE METALLIC 
MINING OPERATIONS. - METALLIC MINING OPERATIONS 
SUBJECT OF ANY MINERAL AGREEMENT OR FINANCIAL OR 
TECHNICAL ASSISTANCE AGREEMENT, AS SUCH 
AGREEMENTS ARE DEFINED UNDER REPUBLIC ACT NO. 7942 
OR THE PHILIPPINE MINING ACT OF 1995, SHALL PAY IN 
ADDITION TO THE TAXES IMPOSED UNDER THIS CODE, A 
WINDFALL PROFIT TAX ON NET INCOME FROM METALLIC
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MINING OPERATIONS BASED ON THE RATES IN 
ACCORDANCE WITH THE FOLLOWING SCHEDULE:
MARGIN
EQUAL TO 30% BUT NOT OVER 40% 
OVER 40% BUT NOT OVER 55% 
OVER 55% BUT NOT OVER65% 
OVER 65% BUT NOT OVER75% 
OVER 75%
RATE
1.0%
3.0%
5.0%
7.0%
10.00%
PROVIDED, THAT THIS WINDFALL PROFIT TAX SHALL NOT 
BE DEDUCTIBLE FROM TAXABLE INCOME AS DEFINED IN 
SECTION 31 OF THIS CODE: PROVIDED, FURTHER, THAT, 
FOR PURPOSES OF THIS SECTION, "WINDFALL" OR 
"MARGIN" MEANS THE RATIO OF "NET INCOME FROM 
METALLIC MINING OPERATIONS" TO GROSS OUTPUT, 
WHERE THE DEFINITION OF "GROSS OUTPUT"IS AS 
PROVIDED UNDER SECTION 151(B)(1) OF THIS CODE AND 
"NET INCOME FROM METALLIC MINING OPERATIONS" IS AS 
PROVIDED UNDER SECTION 151-A(B)(2), EXCEPT THAT 
ALLOWABLE TAX DEDUCTIONS SHALL INCLUDE CORPORATE 
INCOME TAX AND ROYALTY, UNDER SECTION 151-A: 
PROVIDED, FINALLY, THAT, FOR THE PURPOSE OF 
COMPUTING THE WINDFALL OR MARGIN, THE OPTIONAL 
STANDARD DEDUCTION UNDER SECTION 34(L) OF THIS 
CODE SHALL NOT BE USED.
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(B) ANNUAL RETURNS AND PAYMENT. - THE MINING 
CONTRACTOR OR OPERATOR SHALL FILE A WINDFALL 
PROFIT TAX RETURN AND PAY THE TAX DUE THEREON, IF 
ANY WITHIN SIXTY (60) DAYS AFTER THE END OF THE 
CALENDAR YEAR OR FISCAL YEAR, SUBJECT TO RULES AND 
REGULATIONS TO BE PROMULGATED BY THE SECRETARY OF 
FINANCE, UPON RECOMMENDATION OF THE 
COMMISSIONER.
THE WINDFALL PROFIT TAX RETURN SHALL BE EITHER 
ELECTRONICALLY OR MANUALLY FILED WITH AND THE TAX 
PAID TO THE BUREAU OF INTERNAL REVENUE THROUGH 
ANY REVENUE DISTRICT OFFICE THROUGH THE REVENUE 
COLLECTION OFFICER, AUTHORIZED AGENT BANK, OR DULY 
AUTHORIZED TAX SOFTWARE PROVIDER, EXCEPT AS THE 
COMMISSIONER OTHERWISE PERMITS.
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SEC. 8. A new section designated as Section 151-C under Chapter VII, Title VI
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of the National Internal Revenue Code of 1997, as amended, is hereby inserted, and
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shall read as follows:
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"SEC. 151-C. RING-FENCING OF METALLIC MINING 
OPERATIONS. - FOR PURPOSES OF REPORTING AND PAYING THE 
TAXES UNDER SECTION 151-A AND SECTION 151-B OF THIS 
CODE, A METALLIC MINING CONTRACTOR SHALL BE TREATED AS 
A SEPARATE TAXABLE ENTITY WITH RESPECT TO EACH AND 
EVERY MINERAL AGREEMENT OR FINANCIAL OR TECHNICAL
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ASSISTANCE AGREEMENT IT HOLDS AND/OR OPERATES; 
PROVIDED, THAT WHERE A CONTRACTOR HAS A VALID AND 
EFFECTIVE OPERATING AGREEMENT, THE MINING OPERATOR 
SHALL BE CONSIDERED AS THE SEPARATE TAXABLE ENTITY FOR
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PURPOSES OF THIS SECTION: PROVIDED FURTHER, THAT WHERE
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THERE IS MORE THAN ONE VALID MINING OPERATOR UNDER THE
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SAME MINERAL AGREEMENT OR FINANCIAL TECHNICAL
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ASSISTANCE AGREEMENT, EACH MINING OPERATOR SHALL BE
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DEEMED A SEPARATE TAXABLE ENTITY FOR ITS RESPECTIVE
MINING OPERATIONS UNDER THE AGREEMENT: PROVIDED, 
FINALLY, THAT WHERE A MINING OPERATOR CONDUCTS THE 
MINING OPERATIONS BY VIRTUE OF A VALID OPERATING 
AGREEMENT WITH THE MINING CONTRACTOR, IT IS 
UNDERSTOOD THAT THE MINING OPERATOR IS THE ONE LIABLE 
TO PAY THE PERTINENT TAXES IMPOSED UNDER THIS CHAPTER.
EACH METALLIC MINING CONTRACTOR OR OPERATOR AS A 
SEPARATE TAXABLE ENTITY SHALL BE RESPONSIBLE FOR 
COMPLIANCE WITH THE CORRESPONDING REPORTORIAL AND
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OTHER REQUIREMENTS OF THE APPLICABLE LAWS, RULES AND
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REGULATIONS."
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SEC. 9. A new section designated as Section 151-D under Chapter VII, Title VI
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of the National Internal Revenue Code of 1997, as amended, is hereby inserted, and
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shall read as follows:
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"SEC. 151-D. MONITORING AND AUDIT OF SALES AND
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EXPORTATION OF MINERALS, MINERAL PRODUCTS, AND RAW
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ORES. - THE BUREAU OF INTERNAL REVENUE AND THE BUREAU
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OF CUSTOMS ARE HEREBY AUTHORIZED TO EXAMINE AND
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AUDIT, FOR TAX PURPOSES, ALL SALES AND EXPORTATION OF 
MINERALS, MINERAL PRODUCTS, AND RAW ORES. FOR THIS 
PURPOSE, THE BOOKS OF ACCOUNTS AND RECORDS OF 
METALLIC MINING CONTRACTORS AND/OR OPERATORS, 
INCLUDING ASSAY REPORTS AND THE SALES AND MARKETING 
AGREEMENTS ENTERED INTO BY THEM, SHALL BE OPEN FOR 
INSPECTION BY THE SAID BUREAUS: PROVIDED, THAT THE 
SAID BUREAUS SHALL BE FURNISHED BY THE MINES AND 
GEOSCIENCES BUREAU WITH A COPY OF SUCH ASSAY REPORTS 
AND SALES AND MARKETING AGREEMENTS AS WELL AS THE 
INTEGRATED ANNUAL REPORTS OF METALLIC MINING 
CONTRACTORS AND/OR OPERATORS: PROVIDED, FURTHER, 
THAT, METALLIC MINING CONTRACTORS AND/OR OPERATORS 
SHALL COMPLY WITH DISCLOSURE AND REPORTORIAL 
REQUIREMENTS PURSUANT TO THE TRANSPARENCY 
MECHANISM TO BE INSTITUTIONALIZED UNDER SECTION 14 OF 
THIS ACT."
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SEC. 10. Section 287(A) of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"SEC. 287. Shares of Local Government Units in the Proceeds from the 
Development and Utilization of the National Wealth, -x x x 
(A) Amount of Share of Local Government Units. - Local 
government units shall, in addition to the internal revenue 
allotment, have a share of forty percent (40%) of the gross 
collection derived by the national government from the 
preceding fiscal year from excise taxes on mineral products, 
royalties, and such other taxes, fees or charges, including 
related surcharges, interests or fines, and from its share in 
any co-production, joint venture or production sharing 
agreement in the utilization and development of the national 
wealth within their territorial jurisdiction.
FOR PURPOSES OF THIS SUBSECTION, THE SHARE OF 
EACH LOCAL GOVERNMENT UNIT SHALL BE 
RELEASED DIRECTLY TO THE PROVINCIAL, CITY, 
MUNICIPAL, OR BARANGAY TREASURER, AS THE CASE 
MAY BE, WITHIN A PERIOD OF SIX (6) MONTHS FROM 
PAYMENT, WITHOUT NEED FOR FURTHER ACTION AND 
WITHOUT BEING SUBJECT TO ANY LIEN OR 
HOLDBACK THAT MAY BE IMPOSED BY THE NATIONAL 
GOVERNMENT. THE DEPARTMENT OF FINANCE, 
DEPARTMENT OF BUDGET AND MANAGEMENT, AND 
DEPARTMENT OF THE INTERIOR AND LOCAL 
GOVERNMENT SHALL JOINTLY ISSUE THE NECESSARY
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RULES AND REGULATIONS FOR A STREAMLINED 
DISBURSEMENT SCHEME TO ENSURE THE SPEEDY 
AND TIMELY RELEASE OF LOCAL GOVERNMENT 
SHARES IN THE NATIONAL WEALTH: PROVIDED, THAT THIS 
SHALL BE OVER AND ABOVE THE BUSINESS TAX THAT THE 
LOCAL GOVERNMENT MAY IMPOSE ON MINING 
CONTRACTORS, WHICH SHALL NOT EXCEED FIFTY PERCENT 
(50%) OF 1% OF THE TOTAL GROSS OUTPUT.
(B) Share of the Local Governments from Any Government 
Agency or Government-owned or -Controlled Corporation. - x x x
X X x"
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SEC. 11. A new section designated as Section 287-A under Chapter II, Title XI
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of the National Internal Revenue Code of 1997, as amended, is hereby inserted, and
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shall read as follows:
"SEC. 287-A. DISPOSITION OF ROYALTY PROCEEDS FROM 
MINERAL RESERVATIONS. - A TEN PER CENTUM (10%) SHARE 
OF THE ROYALTY DERIVED FROM MINING OPERATIONS WITHIN 
MINERAL RESERVATIONS UNDER SECTION 151-A(A)(1) AND 
SECTION 151-A(D) OF THIS CODE SHALL ACCRUE TO THE MINES 
AND GEOSCIENCES BUREAU TO BE ALLOTTED FOR SPECIAL 
PROJECTS AND OTHER ADMINISTRATIVE EXPENSES RELATED TO 
THE EXPLORATION AND DEVELOPMENT OF OTHER MINERAL 
RESERVATIONS, AS PROVIDED IN SECTION 5 OF REPUBLIC ACT 
NO. 7942 OR THE PHILIPPINE MINING ACT OF 1995."
16


1 
SEC. 12. Royalty due to Indigenous Cultural Communities from
2 
Mining Operations Within Ancestral Domains. -The royalty due to Indigenous
3 
Cultural Communities/Indigenous Peoples (ICCs/IPs) under Republic Act No. 7942 or
4 
the Philippine Mining Act of 1995 is based on the right of the ICCs/IPs to benefit from
5 
the utilization, extraction, and development of lands and natural resources within
6 
their ancestral domains, done with their free and prior informed consent, and shall
7 
be agreed upon by the parties concerned: Provided, that the ICC/IP shall be paid
8 
not more than two percent (2%) of the gross output of minerais produced from the
9 
ancestral domain. Provided further, that parties concerned shall be free to negotiate
10 
on its components, both monetary and non-financial, such as employment, social
11 
development, and environmental management of the ancestral domain.
12 
SEC. 13. Incorporation of Fiscal Regime in Mineral Agreements. -The
13 
fiscal regime and revenue sharing arrangement provided in this Act shall accordingly
14 
be embodied, as appropriate, in the mineral agreements and financial or technical
15 
assistance agreements on metallic mineral production entered into by the
16 
government.
17 
SEC. 14. Vested Rights. - Save for the implementation of the new Section
18 
151-A(D) of the Code, valid mineral agreements and financial or technical assistance
19 
agreements existing prior to the effectivity of this Act shall continue to be governed
20 
by their respective terms and conditions until the expiration of their periods, except
21 
if said agreements provide that terms and conditions resulting from the repeal or
22 
amendment of existing laws or regulations or from the enactment of new law or
23 
regulation shall be considered written into and part of said mineral agreements and
24 
financial or technical assistance agreements.
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1 
SEC. 15. Transparency and Accountability. - The Government, through
2 
the Department of Finance, and in coordination with other relevant agencies, shall
3 
institutionalize a mechanism for the public disclosure and scrutiny of all extractive
4 
industry-related data, including but not limited to tax, non-tax, and revenue data in
5 
the extractives value chain, pursuant to best practices in the open, accountable, and
6 
good governance of mineral resources: Provided, that the disclosure shall include
7 
the general information sheet and other reportorial requirements regularly submitted
8 
to the Securities and Exchange Commission.
9 
Any provision of law to the contrary notwithstanding, all businesses and
10 
activities engaged in the exploration, development, and utilization of minerals and
11 
other natural resources, being vested with public interest, shall be exempt from the
12 
application of confidentiality clauses in the National Internal Revenue Code of 1997,
13 
as amended, including Section 270 in relation to Section 71, on disposition of income
14 
tax returns and publication of lists of taxpayers and filers, and in Republic Act No.
15 
11232 or the Revised Corporation Code of the Philippines, including Section 177
16 
thereof on reportorial requirements of corporations.
17 
SEC. 16. Appropriations. - The amount necessary to carry out the
18 
provisions of this Act shall be included in the annual General Appropriations Act.
19 
SEC. 17. Implementing Rules and Regulations. - The Department of
20 
Finance shall, upon the recommendation of the Bureau of Internal Revenue, and in
21 
consultation with the Department of Environment and Natural Resources, issue rules
22 
and regulations to implement this Act within ninety (90) days from its effectivity.
23 
Failure to promulgate the said rules and regulations shall not prevent the
24 
implementation of this Act upon its effectivity.
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1 
SEC. 18. Transitory Clause. - Large-scale metallic mining contractors and/or
2 
operators shall immediately be subject to the fiscal regime provided herein after one
3 
hundred and fifty (150) days from the effectivity of this Act.
4 
SEC. 19. Separability Clause. - If any provision of this Act is declared
5 
invalid, the other provisions not affected thereby shall remain in full force and effect.
6 
SEC. 20. Repealing Clause. - All other laws, acts, decrees, executive orders,
7 
rules, and regulations, or parts thereof which are contrary to or inconsistent with this
8 
Act are hereby repealed or modified accordingly. If the contrary or inconsistent laws,
9 
acts, decrees, executive orders, and rules and regulations cover subjects or matters
10 
besides large-scale metallic mining, they shall be repealed or modified by operation
11 
of this section only to the extent that they are applicable to large-scale metallic
12 
mining, and shall, as appropriate, continue to be effective insofar as they apply to
13 
the other matters within their coverage.
14 
SEC. 21. Effectivity. — This Act shall take effect after fifteen (15) days
15 
following its complete publication in the Official Gazette or in a newspaper of general
16 
circulation.
17
Approved,
19