2012年-IMF国际货币组织全球_Philippines_Reform_of_the_Fiscal_Regimes_for_Mining_and_Petroleum_57页_830kb

Summary of the Philippines: Reform of the Fiscal Regimes for Mining and Petroleum

Core Content

This document is a Technical Assistance Report prepared by the International Monetary Fund (IMF) in June 2012, focusing on the fiscal regimes for the mining and petroleum sectors in the Philippines. The report provides an analysis of the current system, highlights issues, and suggests reforms to improve revenue collection and fiscal competitiveness.

Main Points

1. Overview of the Mining and Petroleum Sectors

• Mining Sector:

  • The Philippines has a long history of mineral production, but the sector contributes a small share to GDP, exports, and government revenue.
  • The mining industry includes small-scale and large-scale operations, with small-scale mines accounting for about 34% of total production value.
  • Major minerals mined are gold, copper, and nickel, with gold contributing about 50% of the total value.
  • In 2010, mining production was valued at P145.3 billion, contributing 1.6% to GDP.
  • The Tampakan project, a large-scale copper mine, is expected to significantly boost the sector, with an estimated investment of US$5.9 billion and potential annual gross production of US$2 billion.

• Petroleum Sector:

  • The sector is limited, with only two offshore fields producing crude oil and natural gas.
  • The Malampaya field is the main source of natural gas and condensate.
  • The Philippine National Oil Company (PNOC) and Chevron are joint venture partners in the Malampaya project.
  • The sector is governed by the Petroleum Exploration and Development Act of 1972, which allows for service contracts and includes Filipino Participation Incentive Allowance (FPIA).

Key Fiscal Regimes and Issues

2. Mining Fiscal Regimes

• There are three fiscal regimes for large-scale mining:

  • Mineral Production Sharing Agreements (MPSAs): Apply to both mineral reservations and non-reservations. Require a minimum 60% local ownership.
  • Financial and Technical Assistance Agreements (FTAAs): Allow 100% foreign ownership, but only for mines outside mineral reservations.
  • Additional Government Share (AGS): A 50% share of net mining revenue after the recovery period, acting as a minimum tax.

• Current Issues:

  • The mining sector's contribution to government revenue is low, especially compared to its GDP share.
  • Small-scale mines and tax holidays for new mines reduce tax revenues.
  • The current fiscal regime is not competitive, especially for low-profit projects due to the 50% AGS.

• Proposed Reforms:

  • Combine 5% royalty and 2% mineral excise into a single royalty, collected by the Bureau of Internal Revenue (BIR).
  • Replace AGS with a 10% surcharge on cash flow after CIT but before financing to reduce the regressive impact on low-profit projects.
  • Repeal tax incentives under the Mining Act and Omnibus Investment Code.
  • Consolidate domestic tax rules in the National Internal Revenue Code (NIRC) and income tax measures affecting mining in a separate chapter.
  • Allow deductions for mine rehabilitation funds to promote environmental responsibility.
  • Adopt a thin capitalization rule to limit excessive debt usage.

Revenue Sharing with Local Governments

• LGUs receive 40% of national revenue from mining, including excise tax (2%) and royalty (5%).
• Revenue sharing is delayed by at least a year.
• LGUs also collect their own local taxes and fees, which account for about 9% of total taxes paid by the mining industry.
• Recommendation:
  • Enact a continuous appropriation for LGU share distribution.
  • Make payments based on estimated amounts, with adjustments when final figures are known.
  • Establish a joint monitoring commission with national and local representation to oversee revenue sharing.

Petroleum Fiscal Regime

• The petroleum sector is governed by service contracts under the Petroleum Exploration and Development Act of 1972.
• The FPIA allows up to 7.5% of gross proceeds to be allocated to Filipino participants.
• The contractor's share of net proceeds is capped at 40% after operating expenses and FPIA.
• The current regime is straightforward, but a quantitative assessment of alternatives was not completed due to time constraints.
• Recommendation:
  • For future bid rounds, consider profit-based sharing instead of the current net proceeds sharing, where the government share increases with profitability.

Extractive Industries Transparency Initiative (EITI)

• The EITI promotes transparency and accountability in the extractive industries by requiring the publication and reconciliation of company payments and government revenues.
• The Philippines has not yet fully implemented the EITI, but the report suggests the need for improved governance and public disclosure of mineral and petroleum revenues.

Conclusion

• The mining sector, though significant, has low tax and royalty contributions due to a combination of small-scale operations, tax holidays, and historical limitations on foreign ownership.
• The current fiscal regimes are not competitive, especially for low-profit projects, and need reform to ensure fair revenue sharing and improved fiscal attractiveness.
• The petroleum sector is small but has potential in the South China Sea Basin.
• Legislative reforms are essential to align the fiscal regime with international standards and improve revenue generation and governance.