THE uncertainty over how the mining industry is taxed must be removed in order to unleash the nickel sector’s potential for creating jobs, including in industries that depend on the metal like renewable energy and electric vehicles, a senior legislator said.
In a policy paper, “The Future in Nickel,” House Ways and Means Chair Representative Jose Maria Clemente S. Salceda, who chairs the House Ways and Means Committee, estimated the job-creating potential of the industry at 1.3 million over the next 10 years.
The Philippines remains a major producer of nickel with output of 420,000 metric tons in 2019, Mr. Salceda noted.
“Top nickel-buyer and electric vehicle manufacturer Tesla is already larger in market cap than all other major car manufacturers combined. Chinese electric vehicle manufacturers are also rising. Nickel will be very big, and as one of the world’s largest producers of nickel, we will be very important, if we are wise,” he said.
Mr. Salceda said the Philippines is unable to open new mines for nickel and copper due to delays in legislating a new fiscal regime for the industry.
Executive Order No. 79, issued in 2012, bars the signing of new mineral agreements “until legislation rationalizing existing revenue-sharing schemes and mechanisms” takes effect.
“By enacting a fiscal regime on mining, the country will be able to negotiate new, more responsible mining agreements that can keep its nickel supply sustainable,” Mr. Salceda said, adding that he expects House Bill (HB) No. 6135, or the proposed Fiscal Regime for the Mining Industry Act, to hurdle the chamber next year.
The measure proposes to increase the mining excise tax to 5% from the current 4%. It also establishes a sovereign wealth fund to be built up over six years.
“The setting up of the Mineral Resources Trust Fund in HB 6135 will also ensure that the country is able to generate savings from booms in the prices of mineral commodities such as nickel,” Mr. Salceda said.
Mr. Salceda also called for more domestic value-added to maximize the benefits from the extractive industry.
“In this regard, the urgent enactment of the country’s main instrument of industrial policy, the Corporate Recovery and Tax Incentives for Enterprises Act, is also extremely important,” he said.
Mr. Salceda said he will work closely with the Department of Trade and Industry and the Department of Environment and Natural Resources to ensure the industry’s sustainability. — Kyle Aristophere T. Atienza