Philippines, the very rich resources of the subsoil are extracted but little or nothing gets to the local communities

ROME – From the city of Tacloban, which was also the capital of the Philippines, the South East Asian archipelago made up of over 7,000 islands, two crucial themes emerge, linked to the environment and to the inequalities that are increasing globally. Emblematic issues, therefore, with direct links to the distortions of the contemporary global economic system, relating to the senseless use of the territory and the lack of interest for the inhabitants of the mining areas – the baranggay, the smallest local government unit in the Philippines, where there are 138 – to which not even a cent of the excise duties (which are poorly paid) that foreign companies pay to the Philippine state reaches. The Asian country is among the top 5 in the world for the overall level of mineral resources. It is estimated that the total value of the wealth of its subsoil amounts to 1.4 trillion US dollars; it is then in second place for gold deposits, it is third for copper as well as with reserves of 152 million barrels of oil and 105 billion cubic meters of natural gas.

What would those resources be for? The quota for local governments would be a great help to carry out development projects, such as road concrete, water supply and school buildings, among others. There are constant calls for all mining companies operating in the province to strictly comply with existing and relevant environmental laws. The 20 km long Homonhon Island is mostly known for metal ores. In 2022 the mining companies extracted 605,176 tons of nickel ore and 19,105 tons of chromite from the island.

The earnings of mining companies. Ben Evardone, governor of East Samar – an island that is part of the Visayas, one of the three main groupings of islands into which the Philippines is administratively divided – reiterated his request that local government units that house extractive companies should have a share of the excise duty levied on mining operations in Homonhon Island in Guiuan City. Evardone himself revealed that host local governments have yet to receive their share of excise taxes collected by the national government from mining companies operating on Homonhon Island, where as many as four mining companies operate: Techiron Resources, Inc., Emir Mineral Resources Corp., King Resources Mining Corp. and Global Min-met Resources, Inc. These mining companies had combined earnings of 9.3 billion Philippine peso (PHP) last year, according to the governor.

The rights of local communities. Under the 1991 Local Government Code, local governments are entitled to 40% of gross earnings from “mining taxes, royalties from mineral reserves, forest charges and taxes and revenues collected from energy resources” in their areas. The tax collected will be divided among the local government units hosting the mining operations, of which 40% for the village, 30% for the municipality and 30% for the province.As required by the National Internal Revenue Code of 1997, an excise duty of 4% will be imposed on extracted or produced minerals or quarried resources based on the actual market value of the gross production of these products at the time of their removal. An excise duty – it should be remembered – is a tax on the production, sale or consumption of a commodity in a country.