Finance Secretary Ralph G. Recto assured the public that the enactment of the long-awaited enhanced mining fiscal regime will continue to protect the environment and transform the country’s natural resources into a key driver of sustainable growth, attracting investments, generating jobs, and boosting revenues to support the delivery of quality public services.
“With this law, we send a very clear and powerful message. Progress shall never come at the cost of our people nor our planet. Minerals are finite. Once extracted, they are gone forever. But if we use them wisely, tax them fairly, protect our environment as we mine, and ensure that revenues return to the people, then their value will outlive all of us,” President Ferdinand R. Marcos, Jr. said in his speech during the ceremonial signing of the law on September 4, 2025.
“Titiyakin ng batas na ito na ating mapangalagaan ang kalikasan at ang kita mula sa ating mineral resources ay maibabalik sa taumbayan sa pamamagitan ng dekalidad na trabaho, mas maunlad na komunidad, at mas maayos na serbisyong pampubliko. It is not only pro-investment; it is also pro-future, pro-people, and pro-Filipino,” Secretary Recto said.
Signed on September 4, 2025, Republic Act (RA) 12253, or the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, simplifies the mining fiscal regime by removing complex tax distinctions among different mining agreements.
All large-scale metallic mining operations are now subject to a unified tax regime aimed at encouraging investment in the sector and promoting tax compliance.
The law also guarantees the government’s fair share of revenues by subjecting mines outside mineral reservations to royalty tax and all large-scale metallic mining operations to a windfall profits tax. This will especially benefit local government units (LGUs), which are entitled to a share of the national wealth.
Specifically, the new regime includes a 5-tier royalty rate, ranging from 1% to 5% for mines outside mineral reservations; a minimum royalty rate of 0.1% on gross output for mines below the margin threshold; and a 5-tier windfall profits tax ranging from 1% to 10%.
The law likewise establishes safeguards by implementing a 2:1 debt-to-equity ratio or a thin capitalization rule to limit the amount of tax-deductible borrowing cost arising from related-party debt.
Moreover, the law adopts a ring-fencing rule on a project-by-project basis to prevent the consolidation of income and expenses of all mining projects by the same taxpayer. This prevents companies from offsetting losses from more profitable projects.
Additionally, RA 12253 ensures the enforcement of strict monitoring and auditing standards on mineral sales and exports.
It also promotes transparency in the mining sector by mandating the public disclosure of data and establishing a multi-stakeholder mechanism to enable participatory governance in accordance with international standards for open and accountable extractive resource management.
Finally, the law earmarks funds to support research, monitoring, and enforcement in the sector.
In particular, 10% of the royalty collected from mines within mineral reservations will be invested in mineral exploration and research.
The funds will also be used to establish laboratories and equip the Bureau of Internal Revenue (BlR) with specialized tools that will enable proper oversight and validation of mineral resource valuation for taxation purposes.
The new measure is expected to generate an estimated average annual incremental revenue of PHP 6.26 billion for existing mines.
“The Department of Finance is committed to implementing this law swiftly, efficiently, and with full transparency. We will also continue to engage with all stakeholders to ensure that the law delivers on its promise,” the Finance Chief stressed.
