President Rodrigo Duterte signed Executive Order 130 (“EO 130”) on 14 April 2021, lifting a nine (9)-year moratorium and allowing the Government to enter into new agreements concerning mineral production with qualified persons, subject to the latter’s compliance with the relevant mining laws and regulations.
EO 130 amended Section 4 of Executive Order No. 79 signed by former President Benigno Aquino in 2012, which suspended the grant of new mineral agreements “until a legislation rationalizing existing revenue sharing schemes and mechanism shall have taken effect.”
The lifting of the moratorium on new mineral agreements came after the enactment of Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (“TRAIN”) Act in 2017. Under Section 48 of the TRAIN Act, the rate of excise tax on minerals, mineral products, and quarry resources was raised from 2% to 4%.
Under EO 130, the Government can enter into new mineral agreements, and the Department of Environment and Natural Resources (“DENR”) may continue to issue Exploration Permits under existing laws, rules and regulations. EO 130 further provides that the DENR shall formulate the “terms and conditions in the new mineral agreements that will maximize government revenues and share from production.”
The issuance of EO 130 follows the favorable recommendation of the country’s economic managers. Earlier this year, the Department of Finance urged the revival of the mining industry to aid in the economic recovery of the Philippines amid the decline in economic growth as a result of the COVID-19 pandemic.