TOPIC: Mining in the Philippines

FOR: Mining in the Philippines

FROM: Carmel Louise Vicencio

According to the general terms and conditions provided by Philippine law, the State is permitted
to enter into either technical or financial assistance agreements with foreign-owned corporations
for large scale mining exploration, the development, and utilization of minerals, petroleum, and
other mineral oils. The terms and conditions of the above mentioned financial or technical
assistance agreements are contained in the Philippine Mining Act. Under this law, only the
following “qualified persons” may engage in the exploration, utilization, and development of
mineral resources in the Philippines:

1. Any citizen of the Philippines with capacity to contract,

2. Corporations, Partnerships, Associations, or Cooperatives organized or authorized for the

purpose of engaging in mining, with technical and financial capability to undertake mineral
resources development and duly registered in accordance with the law at least sixty per
centum (60%) of the capital of which is owned by citizens of the Philippines

A legally organized foreign-owned corporation may be deemed a qualified person for purposes
of granting an exploration permit, financial or technical assistance agreement, or mineral
processing permit. A financial or technical assistance agreement is a contract that offers either
financial or technical assistance for large-scale exploration, development, and utilization of
mineral resources in the Philippines. However, foreign ownership is restricted for enterprises that
undertake activities listed in the Foreign Investment Negative List (FINL). Large-scale mining is
restricted to companies with 100% Filipino ownership. If the mining activity is conducted under
a Small-Scale Mining Permit (SSMP), which usually covers 20 hectares of mining area, a
company with at least 60% Filipino ownership can engage in large-scale mining. A 100%
foreign-owned mining company can only engage in exploration and mineral processing
activities, but it may attempt large-scale mining activities under a financial and technical
assistance agreement with the Philippine government.