The Congressional bicameral conference committee has recently ratified the Department of Finance’s (DOF) proposed rationalization of the country’s mining fiscal regime, which will create a fair and equitable mining environment for all.
The bicameral committee report on the disagreeing provisions of Senate Bill No. 2826 and House Bill No. 8937, or the Enhanced Fiscal Regime for Large-Scale Mining Act, was signed on June 11, 2025.
It is one of the Legislative-Executive Development Advisory Council’s (LEDAC) priority measures for the 19th Congress, and was supported by President Ferdinand R. Marcos, Jr.
The reform delivers a long-overdue update to the outdated tax structure governing the mining sector. It simplifies the fiscal system, guarantees the government’s fair share of revenues, strengthens environmental safeguards, and provides fiscal predictability and stability for investors—all while promoting responsible and sustainable mineral development.
Under the current fiscal regime, the obligations of mining groups and companies vary depending on the mining agreement, resulting in a complex tax system.
It likewise only imposes royalty, which is the share of the government from the extraction of the non-renewable resource, for mines operating within a mineral reservation.
With the proposed measure, the fiscal regime on mining will be simplified by removing the tax distinctions on mining agreements.
Furthermore, it introduces mechanisms to ensure that the government will get its fair share from the extraction of these non-renewable resources.
More specifically, a margin-based royalty tax on mines operating outside mineral reservation and a windfall profits tax on all mines will be imposed, wherein the approved version adopts fewer tiers on the two new taxes for easier compliance and administration, discouraging tax avoidance.
Similarly, the bill includes provisions on ring-fencing to prevent the consolidation of income and expenses of all mining projects by the same taxpayer. This is a safeguard against possible deduction of losses from other mining projects from more profitable projects.
Lastly, the reform will institutionalize transparency and accountability mechanisms, ensuring that companies make proper payments to the government, host, and neighboring communities. This will minimize revenue leakages (i.e. questionable transfer pricing practices), maximize revenue collection, and promote good governance.
“I thank the Congress for its swift ratification of this long-overdue reform. With this proposal, we are providing a straightforward and streamlined fiscal policy to encourage more investments in our mining sector. This bill will help fully unlock the Philippines’ rich mineral potential and position us as a major player in mineral production,” Finance Secretary Ralph G. Recto said.
“This is a win-win for the Filipino people and responsible industry players. It ensures a just return for our non-renewable resources, drives investments that create jobs, and strengthens our position as a key player in the global minerals supply chain—especially for critical minerals that are essential to clean energy transition,” he added.
“Now that we’re nearing the finish line, we hope this measure truly unlocks the potential of our country’s mineral wealth and contributes to sustainable economic growth. Naniniwala tayo na marami pang kailangang ayusin at repormahin sa sektor ng pagmimina para matiyak na makakasabay tayo sa mabilis na pag-unlad ng ating mga karatig-bansa sa rehiyon,” Ways and Means Subcommittee Chair and Sponsor of the Bill Joseph Victor Ejercito said.
The bill is expected to generate additional mining revenues for the government, amounting to PHP 25.06 billion from 2025 to 2028.
