Finance Secretary Carlos Dominguez III has directed local treasurers in areas hosting mining projects to assess the impact on the would-be affected local government units (LGUs) of the closure or suspension of 28 mine sites across the country.
Dominguez said he issued the directive because alongside the massive loss of jobs and its effect on the national economy, last week’s move by the Department of Environment and Natural Resources (DENR) might imperil the fiscal state of the affected LGUs, given that mining companies account for a hefty part of the tax revenues collected by local governments in municipalities hosting mine sites.
“On the revenue side, our primary concern is the revenues of the municipalities. That’s why we asked the treasurers already to give us a quick-round assessment of how much is going to be lost in revenues,” he said in a chance interview by finance reporters.
Preliminary data from the DOF’s Bureau of Local Government Finance (BLGF) show that at least 10 municipalities and one city would be affected by the DENR’s order to close down 23 mine sites, while one city and four municipalities would be affected by the suspensions.
In response to Dominguez’s directive, BLGF Executive Director Niño Alvina said he has issued a memorandum “directing city and municipal treasurers in all localities hosting mining projects to submit their complete and updated reports by Friday, February 10.”
Treasurers of LGUs are under the supervision of the DOF through its BLGF.
In Department Order 049-2016 issued in September last year, Dominguez instructed local treasurers to include in their quarterly and annual financial reports to the DOF all environment and natural resources revenues and expenditures, particularly the payments made by the mining and other extractive industries to their respective LGUs.
This DOF order provides for an efficient mechanism for municipal treasurers in LGUs hosting mine sites to present their respective assessments fast enough given that they have been forwarding their Statements of Receipts and Expenditures electronically since 2011 and are now required to submit them through the web-based Environment and Natural Resources Data Management Tool (ENRDMT).
These assessment reports, Dominguez said, will aid the government in coming up with a comprehensive strategy to address the impact of the DENR move on the employment and fiscal situations in the communities where the concerned mining sites are located.
Dominguez said he has already called for a meeting of the Mining Industry Coordinating Council (MICC), which he co-chairs, to assess the impact of the DENR directive.
“We’re just waiting for the response of the other members of the MICC. So we want to have it next week as soon as possible,” Dominguez said in last week’s chance interview.
Dominguez said that initially, he had discussed with the heads of the Office of the Cabinet Secretary and the Departments of Labor and Employment (DOLE), Social Welfare and Development (DSWD), Public Works and Highways (DPWH), and Trade and Industry (DTI) how to address the impact of the DENR move on jobs and LGU revenues in the areas hosting the affected mining projects.
He told the media that during their discussion, DSWD Secretary Judy Taguiwalo said that her department will carry out a census to determine the extent of the jobs displacement, while Cabinet Secretary Leoncio Evasco suggested providing jobs under the government’s national greening program.
DOLE Secretary Silvestre Bello III informed Dominguez that emergency employment can be provided to displaced workers but only for a temporary time and in limited volume, while DTI Secretary Ramon Lopez said he will also pitch in proposals on how to generate jobs in the affected areas.
DPWH Secretary Mark Villar, meanwhile, said he will look into additional projects in communities hardest hit by the closure of mining operations so that jobs for the laid-off workers can be provided under a proposed supplemental budget.
“The Cabinet members are obviously also very concerned about unemployment and people not having income, so we will put our shoulder to the wheel to address that issue first,” Dominguez said.
Dominguez said his primary concern is the negative impact of the DENR directive on jobs, second on municipal finances and third on the country’s GDP growth.
“The national impact, the impact on the GDP—that, of course is a concern. But the people’s welfare is our first concern.
He noted that in Surigao del Norte alone, one company provides jobs to 10,000 people living in rural communities.