Working Towards Building a Green Economy and Sustainable Local Communities


LGUs Advancing Good Governance for Greener, Inclusive Growth – Forum on the Utilization and Development of Natural Wealth

21 February 2013
Panadero, Austere A. I Undersecretary for Local Government

I welcome all the participants and guests of this Convention of LGUs Hosting Extractive Industries in the Philippines, with the theme: LGUs Advancing Good Governance for Greener, Inclusive Growth – Forum on the Utilization and Development of Natural Wealth.

I believe that this forum is an important step in recognizing the important roles that local governments play in promoting and facilitating the responsible development and use of the country’s environment and natural resources that will not allow communities to reap economic and social benefits, but more importantly to utilize these benefits for poverty reduction and environmental sustainability.

Today, in this forum, we have an excellent opportunity to raise and discuss local governments’ issues on mining, and discover ways of collaboration to ensure that extractive industries in the Philippines serve the good of the Filipino people by implementing policies and guidelines for the promotion of responsible mining and environmental protection. 

This forum shall also serve as a venue for the LGUs to discuss persistent issues and come up with unified policy positions on issues: (1) facilitating the release of the rightful share of local government in the national wealth; (2) increasing the governments’ revenues from the extraction and development of natural resources; (3) mitigating/ addressing environmental impacts of mining; (4) resolving inconsistencies between national laws and local ordinances, among others. 

The PDP 2011-2016 identified the mining sector as one of the 10 high-growth potential industries. The Philippines has an estimated 9-million hectares of mineral reserves amounting to USD840 billion or P47.08 trillion. However, statistics show that the mining sector contributed relatively little to GDP and employment-generation over the years (an average of 0.91% of the total GDP from 2000-2009, in 2010, it generated an estimate of 199,000 employment, accounting for 0.6% of the total).

There are also several issues on institutional safeguards such as the need for proper regulation of mining activities esp. for small scale mining and protection of the environment, and the IPs and those host communities.

However, according to ILS (Institute for Labor Studies), total ban on mining activities might not be an appropriate solution to the current challenges that the industry is facing. What is needed is a series of broad based and informed discussion that will result in the right mix of policies for the efficient management of the mining industry by the government and responsible investment and private sector, for the benefit of the workers, communities and the economy.

Hence, on July 6, 2012, President Aquino issued Executive Order No. 79 or the “Institutionalizing and Implementing Reforms in the Philippine Mining Sector, Providing Policies and Guidelines to Ensure Environmental Protection and Responsible Mining in the Utilization of Mineral Resources”. Our national policy is firmly anchored on the principle of sustainable and inclusive development.

While the national government is setting a direction for mineral industry reforms in the country, local governments play a more important and critical role on the exploration, development and utilization of the mineral resources while protecting the environment  within your territorial boundaries. The LGUs are empowered by law (Local Government Code of 1991) to take innovative decisions for this purpose.

Being the frontliners at the local level, local government units should foremost consider the welfare of your respective constituencies. This is where issues on environmental safety, sustainable development, livelihood, and in some cases, the ancestral domain of IPs, among other issues should be taken into consideration. 

In terms of revenue sharing, under the current legal framework, the government gets only 2% excise tax as share in a mineral production sharing agreement, in which local governments get only 40% which usually takes 2-3 years to release to host LGUs. While we facilitate release of your rightful shares, it is the responsibility of the LGUs to ensure that ENR revenues are equitably shared by the communities and re-invested to preserve the social and natural environment while enforcing regulatory measures to prevent environmental degradation.

The DILG also strongly advocates the need for transparency in the major financial flow that these extractive industries generate. Factual revenues based on up-to-date records should be equitably shared by the communities.

We strongly believe the key to the success of our endeavors is the sharing of our skills and resources and to see ourselves as part of all sectors working in sync to advance progress and development for the common good.

In closing, it is clear that the path to sustainable development is a huge challenge especially to our local governments. This forum is indeed a good starting point for us to work collectively in support of the local governments in this country. How do we move forward from here? That is our challenge.

The DILG commits to supporting such an effort. We need to strengthen LGUs ability to make wise decisions concerning the extraction and development of natural resources; provide them fast, targeted advice on mining-related policies, investments and developments. DILG is one with you as we equally strive for economic development while not sacrificing our environment and natural resources for the sake of the poor and the marginalized sector of our society.

Maraming salamat at magandang umaga sa inyong lahat.