Working Towards Building a Green Economy and Sustainable Local Communities


Response to the Common Policy Positions of LGUs on Mining-related Issues

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

I would like to congratulate everyone for the successful outcome of this forum! Rest assured that the issues raised and policy positions of LGUs will be escalated to reach the concerned NGAs, the Mining Industry Coordinating Council (MICC), and even the concerned Congressional Committees. For the DILG, the clamor of the LGUs is very clear, to respect their rightful share, with timely and well-informed amounts of fund transfer so that sustainable development planning, budgeting, and implementation are hastened.

Through the Philippines Poverty Environment Initiative Program of the DILG and UNDP, we have conducted a comprehensive study and analyzed the entire process of estimating government revenues from natural resources to actual receipt of the funds to disbursement and recording to public dissemination of relevant financial statements which resulted to the identification of gaps or areas that need to be strengthened through new policies or revision of existing laws, information systems and governance processes. 

The DILG and the PPEI recognized that in order to effectuate long-term reforms in the mining industry especially on concerns with regards to local governments’ benefits and revenues derived from the extraction and development of natural resources, the National Government and the Legislature should consider amending certain provisions of the Local Government Code which was passed in 1991.  Various amendments to the LGC are proposed to address the LGUs’ concerns on mining. These are our advocacies under PPEI: 

1)    To ensure the timely release of LGU shares from National Wealth in line with Section 12 of E.O. 79;

  • Addition of automatically appropriated and directly and automatically remitted to the provincial, city, municipal or barangay treasurer concerned to the Section 293. 
  • Deletion of the phrase “from the preceding fiscal year” in Section 290 of the LGC
  • Deletion of the phrase “based on the preceding fiscal year” in Section 291 and replacement of the phrase “calendar year” with “quarter” in Section 291 (a) of the LGC

2)    To give LGUs greater flexibility on how to utilize their shares from National Wealth;

  • Reduction of the 80% minimum percentage of the proceeds from energy resources to be used for lowering the cost of electricity in the host LGUs to 20% to give the LGUs maximum flexibility
  • Addition of the provision that the Secretaries of the Department of the Interior and Local Government and of the Department of Energy may allow exemptions under conditions to be specified through a joint circular

3)    To encourage LGUs to disseminate their financial information through electronic means whenever and wherever possible; and

  • Amend to include a disaggregation (in the e-SRE and Annual Local Budget Memorandum) needed to identify the sources and specific amounts that LGUs receive as their shares from National Wealth. This would also improve transparency of finances received by LGUs and implement the essence of full disclosure policy.

4)    To make the allocation of shares from National Wealth among two or more LGUs hosting the same mining project more equitable.

  • Proposed amendments to Section 292 to replace population and land area as the bases for the sharing formula for LGUs if the natural resources are located in more than one province, city, municipality or barangay with “the proportion of the natural resources that are located in each LGU”.

Not only on the economic returns that we should be concerned about, but moreover on the social, cultural and environmental impacts of mining. The National Government together with the LGUs, CSOs and private sector should ensure that economic returns and benefits of mining are maximized for the benefit of the poor and reinvested to rehabilitate the environment. 

As a long term social protection esp. for the women, children and IPs, the DILG strongly sees the need for the inclusion in the Final Mine Rehabilitation and Development Plan (FMRDP) the determination of the final land use of the area once mining has finished and been completed. The community should not be left with a degraded environment once mining has finished. 

This forum is a great start for the local government sector’s position to be heard with regards to mining, and later, on other extractive industry issues such as on energy. It is imperative that LGUs and community stakeholders are properly consulted because the extraction of natural resources happens on local governments’ jurisdiction. We hope that this initiative would be a regular activity where all issues raised and positions rendered would later be translated into actions. 

To fulfill our aim, we will be facing a tough road ahead.  There are many barriers to overcome but the fruits of addressing this challenge will certainly redound in long-term benefits both for poor Filipinos and the environment.  

Maraming salamat po!