MANILA - President Begnino Aquino's plans to increase taxes on the mining sector and extend a ban on new permits may deter investors, business groups warned yesterday.
Aquino's executive order on mining policy, details of which were released Monday, is aimed at boosting revenues from the sector while increasing environmental safeguards, his aides have said.
The Joint Foreign Chambers, which represents major foreign business groups, said the moratorium on new mining agreements created uncertainty among prospective investors in the mining sector.
The group, in a statement, said companies would not engage in exploration activities unless they had a firm mining agreement and knew how much they would be taxed.
"No mining company can be expected to spend extremely large amounts of money on exploration without certainty, the grant of a mining title and without first knowing the fiscal regime," the statement said.
Australia-New Zealand chamber president Ian Porter said investors would await passage of the new taxes on mining before entering the sector.
"We hope that is done very quickly so investors will make a decision whether to enter the Philippines," he told AFP.
The Makati Business Club, a pro-Aquino business organization, also expressed concern that the moratorium could be in place for a long time while Congress debated the issue.
The club called on Aquino and Congress to quickly pass the bill, "in order to avoid slowdowns to investment inflows that are crucial to the country's aim for inclusive economic growth".
A key provision of Aquino's order is a proposal to hike taxes to five percent of mining companies' gross earnings from the existing two percent, a move that requires approval from a Congress dominated by Aquino allies.
Officials had said they were hopeful it would be passed this year, though they could not give guarantees.
The government estimates the Philippines has at least $840 billion in gold, copper, nickel and other deposits but this has largely been largely untapped, due to anti-mining campaigns, poor infrastructure and security concerns.*AFP
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