Finance Secretary Benjamin Diokno expressed optimism the government will implement a new mining fiscal regime next year.
Diokno made the remark during a session at the 2023 United Nations Climate Change Conference (COP28) in Dubai on Dec. 1, 2023. The session, organized by the World Bank Group (WBG), focused on explicit carbon pricing, fossil fuel subsidy reform and reducing fiscal risks while supporting climate adaptation.
“Given that the Philippines is currently the largest exporter of nickel and will become one of the largest producers of copper in the world, we are committed to implementing the new mining fiscal regime by early next year,” Diokno said.
The House of Representatives approved a bill that seeks to enhance the Philippines’ mining fiscal regime on third reading on Sept. 25, 2023, and it is now pending in the Senate.
Diokno announced in July 2023 that the Marcos administration would simplify the mining tax regime to make the Philippines more competitive with other countries. He said the government opened up mining, and there is a proposal in Congress to improve the industry’s tax system.
He said the goal is to unify the mining policies. “We will just have one tax. We will simplify the tax system and some royalty tax also. But we will try to make the tax system of the Philippines on mining competitive with other countries. That’s the gist of that proposal,” he said in an earlier interview.
Diokno said in a recent roadshow in Canada, a mining country, that many investors expressed interest in the Philippine mining sector.
The government took steps to ramp up mining industry development, along with other key sectors, as part of its plans to grow the economy amid the pandemic. Apart from mining, the administration has been focusing on agriculture and tourism to boost post-pandemic recovery.
Diokno also highlighted the Philippines’ fiscal and economic policies to address climate change. Recognizing the need for large-scale climate-smart investments to accelerate the transition to a low-carbon economy, he said the government had passed a series of game-changing reforms to attract sustainable investments into the country.
The Philippines launched its Sustainable Finance Framework to support its sustainability commitments in 2022. The framework outlines how the Philippines intends to raise green, social or sustainability bonds, loans and other debt instruments in the international capital markets.
The Department of Finance, through the Inter-Agency Task Force on Sustainable Finance (ITSF) or “Green Force,” is building a sustainable finance ecosystem to synergize public and private sector investments.
The Bangko Sentral ng Pilipinas (BSP) and other financial regulatory agencies are also developing principles-based Sustainable Finance Taxonomy Guidelines (SFTG).
The SFTG will serve as a tool to determine whether an economic activity is environmentally or socially sustainable. This will direct private sector investments towards climate change adaptation and mitigation (CCAM) initiatives.