Finance Secretary Benjamin Diokno underscored the need to pass the proposed mining bill that aims to streamline taxes on the sector to attract foreign investors.
Diokno said that based on his observations during the economic team’s recent economic briefings and international roadshows, foreign investors were looking at projects on renewable energy, telecommunications, digitalization and mining.
“That is why the mining law is very important. Because until we approve that, there will be uncertainty, especially on the mining taxation regime. If that is approved, they [investors] will study it. How does it compare with other countries,” Diokno said.
The House Ways and Means Committee earlier approved on a bill establishing a fiscal regime for the mining sector, which will impose a margin-based royalty and windfall profits tax on miners. Large-scale metallic mining operations within mineral reservations will be slapped a 3-percent royalty rate of the gross output of minerals or mineral products extracted while those outside mineral reservations will be taxed with a margin-based royalty on income from metallic mining operations.
Small-scale mining operations will be imposed a royalty rate equivalent to 1/10 of 1 percent of gross output of minerals or mineral products extracted or produced pursuant the People’s Small-scale Mining Act of 1991.
Meanwhile, Diokno said investment pledges from other countries would not happen overnight. Trade Secretary Alfredo Pascual earlier said only nine projects were realized so far out of the 130 projects from the investment leads secured during the foreign trips of President Ferdinand Marcos Jr.
“We can’t expect that to happen overnight… In fact, during our conversation in the Middle East, they wanted specific projects, big projects. So that requires extensive due diligence… And they will have to look closely who will be the partners [for the projects]. So don’t expect that to happen overnight,” Diokno said.
Diokno said the realization of these investment pledges also depends on the “atmosphere” or business environment.
“Because if the business environment is better in other countries, they will go there. But they recognized that Southeast Asia is really the growth center. Southeast Asia will be the source of growth for the coming years. For instance, India and Vietnam are attractive destinations. So we have to compete with these countries,” Diokno said.
“It is not enough to just invite them to come and forget afterwards. They want a personal relationship. For example, my experience during the past administration was that we had constant visits in Japan every six months… We had constant interactions. I think that should also be done in the Middle East. We have to deal with them at the highest level,” Diokno said.
Diokno said two of the usual concerns of foreign investors in the Philippines are the ease of doing business and the high cost of power.