Philippines


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The Philippines produced 11 percent of the world's nickel in 2010. The country's rich natural resources also include major copper deposits, chromium, gold, and silver; minerals made up 8 percent of merchandise exports in 2011. However, with low royalty rates and an ineffective fiscal system, the government receives only a small share of this resource wealth. In July 2012 the government announced it would stop issuing mining licenses while it revised the sector's legal framework.


The Philippines' Performance on the Resource Governance Index


The Philippines received a "partial" score of 54, ranking 23rd out of 58 countries. It ranked in the top half of countries surveyed on all four components, suggesting that the government has made meaningful progress toward improved resource governance.

Rank
(out of 58)
Score
(out of 100)
23 Composite Score 54
24 Institutional & Legal Setting 63
Freedom of information law 33
Comprehensive sector legislation 100
EITI participation 33
Independent licensing process 67
Environmental and social impact assessments required 50
Clarity in revenue collection 83
Comprehensive public sector balance 0
SOC financial reports required 100
Fund rules defined in law N/A
Subnational transfer rules defined in law 100
23 Reporting Practices 54
Licensing process 83
Contracts 0
Environmental and social impact assessments 0
Exploration data 100
Production volumes 100
Production value 100
Primary sources of revenue 67
Secondary sources of revenue 100
Subsidies 0
Operating company names 100
Comprehensive SOC reports 50
SOC production data 5
SOC revenue data 0
SOC quasi fiscal activities 83
SOC board of directors 50
Fund rules N/A
Comprehensive fund reports N/A
Subnational transfer rules 100
Comprehensive subnational transfer reports 33
Subnational reporting of transfers 0
35 Safeguards & Quality Controls 51
Checks on licensing process 67
Checks on budgetary process 78
Quality of government reports 73
Government disclosure of conflicts of interest 100
Quality of SOC reports 33
SOC reports audited 22
SOC use of international accounting standards 0
SOC disclosure of conflicts of interest 100
Quality of fund reports N/A
Fund reports audited N/A
Government follows fund rules N/A
Checks on fund spending N/A
Fund disclosure of conflicts of interest N/A
Quality of subnational transfer reports 0
Government follows subnational transfer rules 33
22 Enabling Environment 46
Corruption (TI Corruption Perceptions Index & WGI control of corruption) 26
Open Budget (IBP Index) 66
Accountability & democracy (EIU Democracy Index & WGI voice and accountability) 52
Government effectiveness (WGI) 52
Rule of law (WGI) 35
Satisfactory Weak
Partial Failing
To explore all data and compare
scores, use the RGI Data Tool.

Institutional & Legal Setting (Rank: 24th/58, Score: 63/100) learn more

The Philippines received a "partial" score of 63, its highest on any component, the product of comprehensive mining legislation but incomplete disclosure requirements.

The Mines and Geosciences Bureau grants exploration permits on a first-come, first-served basis, but there are plans to introduce competitive bidding based on technical, financial, and environmental criteria. The Environment and Natural Resources Department negotiates mineral agreements, which must be approved by the president. Local governments approve contracts for small-scale mining.

The Bureau of Internal Revenue collects payments from large companies; small-scale gold miners pay taxes to the central bank and fees to local governments. Some payments go directly to indigenous groups. All central government revenues are deposited in the national treasury.

Mining projects must undergo an environmental impact review, but rules requiring community consultation and consent are not consistently followed. The Philippines has not passed a freedom of information law. The government took its first steps toward joining the Extractive Industries Transparency Initiative in January 2013.

Reporting Practices (Rank: 23rd/58, Score: 54/100) learn more

With poor contract transparency and uneven disclosure of mining data, the Philippines received a "partial" score of 54.

The current administration provides more information than its predecessors. Maps of licensing areas are posted online and copies of contracts can be requested from the director of the Mines and Geosciences Bureau. However, joint operating agreements between the state-owned Philippine Mining Development Corporation and private firms are not made public, and access to environmental impact assessments is still restricted.

The Mines and Geosciences Bureau regularly publishes information on mineral reserves, production, investments, approved operations, and disaggregated revenues. The Bureau of Internal Revenue reports annual tax data, and the Environment and Natural Resources Department publishes royalty receipts. Royalties paid to indigenous groups are not published. The central bank is the main source of data on production, foreign direct investment, and mining exports. Local governments are less transparent, and their failure to accurately report on artisanal mining skews national statistics.

Safeguards & Quality Controls (Rank: 35th/58, Score: 51/100) learn more

Insufficient checks on the licensing and revenue collection processes led to a "partial" score of 51.

Congress does not play a regular oversight role in the licensing process. Lawmakers have conducted investigations of contract negotiations, but their requests for industry information often go unanswered.

The Commission on Audit oversees all state accounts, including those of the national mining company. Audits are submitted annually to congress, which may launch ad hoc reviews but does not regularly monitor mineral receipts. A recent independent report found significant discrepancies in official data on mineral production and exports, and noted that the government appears to be under-collecting excise taxes.

Enabling Environment (Rank: 22nd/58, Score: 46/100) learn more

With mediocre global rankings on corruption control and the rule of law, the Philippines received a "failing" score of 46.


State-Owned Companies (Rank: 26th/45, Score: 44/100) learn more

The Philippine Mining Development Corporation negotiates agreements on behalf of the government with outside investors. It submits reports to the national Securities and Exchange Commission, but only very limited information on the company's operations is available to the public.

Subnational Transfers (Rank: 16th/30, Score: 61/100) learn more

The central government transfers a portion of mineral revenues to producing regions according to detailed revenue sharing procedures defined by law. Funds must be used for development projects and are notoriously subject to delay. The central government does not provide information on disbursements, but local governments are required to publish receipts.

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