1. Relevant Authorities and Legislation

1.1. What regulates mining law?

Mining law in the Philippines is regulated by the State policies laid down under the 1987 Constitution mandating that the State owns all natural resources.  The main mining legislation is the Philippine Mining Act of 1995, Republic Act (RA) No. 7942 (Mining Act) and its Implementing Rules and Regulations (IRR), Department of Environment and Natural Resources (DENR) Administrative Order (AO) No. 2010-21.  The Mining Act governs large-scale exploration, development and utilisation of mineral resources.

1.2. Which Government body/ies administer the mining industry?

The DENR regulates and administers the mining industry.  Its line bureau, the Mines and Geosciences Bureau (MGB), ensures compliance with the Mining Act and administers and disposes of mineral lands and mineral resources through the grant of exploration permits (EPs) and/or Mineral Agreements (MAs) to duly qualified entities.  Also under the DENR’s mantle is the Environmental Management Bureau (EMB), which supervises the observance of the applicable environmental laws by mining companies.

Executive Order (EO) No. 79, s.2012 (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) constituted the Mining Industry Coordinating Council (MICC), which is tasked with submitting a work plan for the implementation of EO No. 79 and other reforms related to the mining industry.

1.3 Describe any other sources of law affecting the mining industry.

The mining industry is likewise governed by administrative rules and regulations – issued by the Philippine President and the DENR Secretary – that are necessary to enforce the Mining Act, such as the IRR.

Supreme Court jurisprudence interpreting the Constitution and the Mining Act also form part of the law of the land.

The Philippine President has issued EO No. 130, Series of 2021 and lifted the moratorium on MAs previously imposed in 2012 by EO No. 79.  The DENR Secretary has issued AO No. 2021-25, providing for the Implementing Rules and Regulations of EO No. 130, Series of 2021.

The mining industry also has to strictly observe the provisions of the following laws:

  1. the Indigenous People’s Rights Act (RA No. 8371) (IPRA);
  2. the People’s Small-Scale Mining Act of 1991 (RA No. 7076);
  3. the Local Government Code of 1991 (RA No. 7160); and
  4. environmental laws such as:
    1. Environmental Compliance Certificate (Presidential Decree No. 1586);
    2. Environmental Impact Statement (EIS) System (DENR AO No. 2003-30);
    3. Clean Water Act of 2004 (RA No. 9275);
    4. Clean Air Act of 1999 (RA No. 8749);
    5. Revised Effluent Regulations of 1990 (DENR AO No. 35, s.1990);
    6. Toxic Substance and Hazardous and Nuclear Waste Control Act of 1990 (RA No. 6969); and
    7. Ecological Solid Waste Management Act (RA No. 8749).

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2. Recent Political Developments

2.1. Are there any recent political developments in the mining industry?

There is a newly elected Philippine President who has issued statements related to the mining industry, positioning it as one of the major contributors to the country’s economic development.  He has also expressed that his government will be encouraging the export of partially processed ore instead of raw ore.  The Philippine President has also noted the negative environmental impact of mining and has emphasised the need to push for “clean mining” in the country.

There is also a newly appointed DENR Secretary who has yet to issue her own policies in respect of mining.

In December 2021, the previous DENR Secretary issued AO No. 2021-40, providing for the lifting of the ban on the open pit method of mining for copper, gold, silver and complex ores in the country under DENR AO No. 2017-10, and providing for additional enhanced parameters and criteria for surface mining methods.

2.2. Are there any specific steps the mining industry is taking in light of these developments?

The Chamber of Mines of the Philippines, composed of most of the country’s large-scale metallic mineral development companies, welcomed the appointment of the new DENR Secretary and expressed a willingness to work with her to fulfil the government’s drive to balance economic development and environmental protection.

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3. Mechanics of Acquisition of Rights

3.1. What rights are required to conduct reconnaissance?

Under the Mining Act, reconnaissance or prospecting is considered exploration and requires an EP.

An EP is an initial mode of acquiring mining rights and gives the holder the right to conduct exploration for all minerals within a specified area for a period of six years, extendable for another two years.  The exploration work should be based on an approved Work Program.  An EP holder has the right of first option to develop and utilise the minerals in the exploration area upon the approval of the declaration of mining project feasibility.

An EP holder must be eligible as a Qualified Person.  A Qualified Person is defined as “any Filipino citizen of legal age and with capacity to contract; or a corporation, partnership, association or cooperative organised or authorised for the purpose of engaging in mining, with technical and financial capability to undertake mineral resources development and duly registered in accordance with law, at least sixty per cent (60%) of the capital of which is owned by Filipino citizens…”.

A foreign corporation, however, is deemed qualified to hold an EP, Financial or Technical Assistance Agreement (FTAA) or Mineral Processing Permit (MPP).

An EP application is filed with the MGB Regional Office (RO) and includes the following mandatory requirements:

  1. Location map/sketch plan of the permit area.
  2. Two-year Exploration Work Program.
  3. Proof of technical competence and financial capability.
  4. Certificate of Environmental Management and Community Relations Record (CEMCRR)/Certificate of Exemption.
  5. Environmental Work Program (EWP).
  6. National Commission on Indigenous Peoples (NCIP) Certification Precondition (CP).

3.2. What rights are required to conduct exploration?

Please see question 3.1 above.

3.3. What rights are required to conduct mining?

An MA, exclusive for Philippine Qualified Persons, is required to grant a contractor the exclusive right to conduct mining operations and to extract all mineral resources found in the contract area.  It is classified into (a) Mineral Production Sharing Agreement (MPSA), (b) Co-production Agreement, and (c) Joint Venture Agreement.

The MA requirements are:

  1. Corporate documents.
  2. Location map/sketch plan.
  3. Three-year Development/Utilisation Work Program.
  4. Proof of technical competence and financial capability.
  5. Mining Project Feasibility Study.
  6. Final exploration report.
  7. Environmental report.
  8. Approved survey plan.
  9. ECC.
  10. Environmental Protection and Enhancement Program (EPEP).
  11. CEMCRR.
  12. NCIP CP.

An FTAA is reserved for Qualified Persons, including foreign companies, with technical and financial capability to undertake large-scale exploration, development, and utilisation of mineral resources, i.e. a minimum investment of US$50 million for infrastructure and development and minimum authorised capital stock of US$10 million.

The FTAA requirements are:

  1. Corporate documents.
  2. Location map/sketch plan.
  3. Two-year Exploration Work Program.
  4. Proof of technical competence and financial capability.
  5. Posting of financial guarantee/performance bond and letter of credit.
  6. CEMCRR.
  7. EWP.
  8. Approved survey plan.
  9. Environmental Compliance Certificate (ECC).
  10. EPEP.
  11. Social Development and Management Program (SDMP).
  12. NCIP CP.

3.4. Are different procedures applicable to different minerals and on different types of land?

The procedure under the Mining Act is uniform and applies to all mineral resources. Applications for EPs, MPSAs and FTAAs are all filed with, and processed by, the MGB.

Small-scale mining, however, which is limited to Filipino citizens, is governed by the People’s Small-Scale Mining Act. Other exceptions are the quarry resources permits and sand and gravel permits, which are applied for with either the Provincial/City Mining Regulatory Board (P/CMRB), the MGB or the Provincial Governor.

Mining applications on ancestral lands require compliance with the NCIP CP process.

3.5. Are different procedures applicable to natural oil and gas?

Yes.  Presidential Decree No. 1857, as amended, otherwise known as the Oil Exploration and Development Act of 1972, is the law that governs the oil and gas industry.  It provides rules governing service contracts for the undertaking, management and operation of petroleum operations.  The Department of Energy is the authority with responsibility for all exploration, development, utilisation, distribution and conservation of energy.


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4. Foreign Ownership and Indigenous Ownership Requirements and Restrictions

4.1. What types of entity can own reconnaissance, exploration and mining rights?

Natural persons and juridical entities, i.e. corporations, partnerships, associations or cooperatives, may own exploration and mining rights, provided they are Qualified Persons.

4.2. Can the entity owning the rights be a foreign entity or owned (directly or indirectly) by a foreign entity and are there special rules for foreign applicants?

Yes, EPs, FTAAs and MPPs are available to both Filipino and foreign mining entities.  MAs or MPSAs are restricted to Filipino individuals, or companies at least 60% of the capital of which is owned by Filipinos or Philippine companies; thus, foreign parties are limited to a 40% direct equity interest.

4.3. Are there any change of control restrictions applicable?

There are none, but the administrative interpretation of the transfer or assignment of an EP, MA or FTAA includes situations where there is a change of control in the entity holding the same, which requires prior approval of the MGB or the DENR should the same involve an MA or the Philippine President, in the case of FTAAs.

The Philippine Competition Act (RA No. 10667) may also apply in certain transactions.

4.4. Are there requirements for ownership by indigenous persons or entities?

There are none, but their rights are protected under the Constitution and the IPRA, which require the State to recognise and protect the priority rights of Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) to their ancestral lands. ICCs/IPs are entitled to share the benefits from the exploration, development and utilisation of the mineral resources found within their ancestral domain.

The Mining Act and the IPRA both require the prior consent of ICCs/IPs in ancestral lands affected by mining operations.

4.5. Does the State have free carry rights or options to acquire shareholdings?

The State has no such rights or options.

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5. Processing, Refining, Beneficiation, and Export

5.1. Are there special regulatory provisions relating to processing, refining and further beneficiation of mined minerals?

Yes, the Mining Act provides for the grant of an MPP, which grants a Qualified Person the right: to engage in milling, beneficiation, leaching, smelting, cyanidation, calcination or upgrading of ores, minerals, rocks, mill tailings, mine waste, and/or other metallurgical by-products; or by similar means to convert the same into marketable products.

5.2. Are there restrictions on the export of minerals and levies payable in respect thereof?

None, but the government requires necessary transport and export permits from the appropriate agencies. EO No. 79 discourages direct shipping of mineral ores and a national program and road map is being proposed, aimed at the development of value-adding activities and downstream industries for strategic metallic ores. This direction is likely to be pursued further by the new Philippine government.

The Mining Act and its IRR allow the sale of minerals locally and abroad, provided that the minerals and by-products produced are sold at the highest market price and lowest commercially achievable commissions and related fees. The mining contractor may enter into long-term sales and marketing contracts or foreign exchange and commodity hedging contracts, subject to approval by the DENR Secretary upon recommendation of the MGB Director. These are registered with the MGB, and remain confidential.

There are no tax or duty restrictions on mineral exports.

Under the Tax Reform for Acceleration and Inclusion (TRAIN) Act (RA No. 10963) and the recently issued Bureau of Internal Revenue’s Revenue Regulations No. 9-2021, export sales of minerals and mineral products are now subject to 12% Value-Added Tax (VAT) instead of the previous 0% VAT.

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6. Transfer and Encumbrance

6.1. Are there restrictions on the transfer of rights to conduct reconnaissance, exploration and mining?

Yes. The Mining Act IRR allow the transfer of EP or MA/MPSA applications subject to approval of the MGB Regional Director concerned.

An EP may be transferred or assigned to another Qualified Person(s) subject to the MGB Director’s approval. A mining contractor may also file an application for the total or partial transfer of its MPSA or FTAA to a Qualified Person(s) under the pertinent Deed of Assignment which shall contain, among others, a stipulation that the transferee assumes all obligations of the transferor under the MPSA or FTAA. Any transfer of an MPSA or FTAA requires the approval of the DENR Secretary upon the MGB Director’s recommendation. Such transfer or assignment shall not be approved unless the transferor has complied with all the terms and conditions of the MPSA/FTAA and the law at the time of transfer.

6.2. Are the rights to conduct reconnaissance, exploration and mining capable of being mortgaged or otherwise secured to raise finance?

Yes. The Mining Act gives the contractor the right to encumber and create security interests over its rights, interests and obligations under the agreement, subject to government approval. Moreover, the creditor/security holder shall have authority to designate its assignee of the MA in case of the contractor’s default from such loan. The assignee must be a Qualified Person and the assignment needs the DENR Secretary’s approval.

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7. Dealing in Rights by Means of Transferring Subdivisions, Ceding Undivided Shares and Mining of Mixed Minerals

7.1. Are rights to conduct reconnaissance, exploration and mining capable of being subdivided?

Yes, there can be partial or total assignment of EPs, MAs or FTAAs, which require prior government approval, provided the mining rights are current and in good standing and the transferee/assignee assumes all contractual obligations of the transferor/assignor.

7.2 Are rights to conduct reconnaissance, exploration and mining capable of being held in undivided shares?

No. The mining rights of mining permittees and contractors are held by the mining corporation itself. The stockholders owning the shares of the corporation do not have a direct interest in these mining rights. Unincorporated joint ventures may, however, be entered into where the joint venture partners have undivided interests but the mining rights remain in the name of the grantee corporation.

7.3        Is the holder of rights to explore for or mine a primary mineral entitled to explore or mine for secondary minerals?

Yes, the EP holders and mining contracts are entitled to explore, develop, utilise, and process all minerals applied for and associated minerals in the permit areas.  The MGB requires permittees and permit holders to include in the Annual Mineral Resource/Ore Reserve Inventory Report both primary and secondary or accessory minerals.

7.4        Is the holder of a right to conduct reconnaissance, exploration and mining entitled to exercise rights also over residue deposits on the land concerned?

Yes, they are entitled to exercise rights over mine wastes and mill tailings, provided they comply with DENR Memorandum Order No. 99 – 32 S.1999 on the Policy Guidelines and Standards for Mine Wastes and Mill Tailings Management.

7.5        Are there any special rules relating to offshore exploration and mining?

Yes, there are the maximum allowable areas for offshore mining under the Mining Act DENR Memorandum Circular No. 2020-008 on the Revised Guidelines on Offshore Mining, which details the rules and regulations covering offshore exploration and mining within the Philippine territorial sea, and its Exclusive Economic Zone (EEZ) and extended continental shelf, as established under the United Nations Convention on the Law of the Sea (UNCLOS).  It mandates that offshore mining operations shall be conducted in a manner that will not adversely affect biodiversity, the safety of navigation at sea, and other marine activities.

Among the general guidelines are:

  1. delineation by buoys of permit/contract area;
  2. no permanent structures are allowed;
  3. permits/clearances for vessel and/or installation; and
  4. schedules should be put in a “Notice to Mariners”.


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8. Rights to Use Surface of Land

8.1        Does the holder of a right to conduct reconnaissance, exploration or mining automatically own the right to use the surface of land?

No.  The EP, MPSA and FTAA only give exploration and mining rights to mining contractors, but not title over the lands.  However, they acquire auxiliary surface rights and easement rights.  Thus, mining contractors have to negotiate with the surface land owners on the purchase or lease of the lands to be used.  The easement right disallows surface owners, occupants and concessionaires from preventing the entry of holders of mining rights into private lands when conducting mining operations.

8.2        What obligations does the holder of a reconnaissance right, exploration right or mining right have vis-à-vis the landowner or lawful occupier?

The permit holder or mining contractor is obliged to pay just compensation to the affected surface rights owner, both for the land use and the damages caused on the land and improvements.

8.3        What rights of expropriation exist?

The Mining Act affords mining contractors the right to freedom from expropriation of their properties, except for public use or in the interest of national welfare or defence and upon payment of just compensation.  In such cases, foreign investors or enterprises shall have the right to remit sums received as compensation for the expropriated property in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance.


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9. Environmental

9.1    What environmental authorisations are required in order to conduct reconnaissance, exploration and mining operations?

The Mining Act requires the following environmental documents/programs for a mining project during exploration, mine development/construction, commercial production and mine decommissioning:

  1. CEMCRR showing an applicant’s past environmental record/performance;
  2. EWP describing strategies for environmental protection and enhancement;
  3. ECC and EIS containing the environmental and social plans;
  4. EPEP illustrating the operational link between the ECC and the mining contractor’s commitments; and
  5. Final Mine Rehabilitation and/or Decommissioning Plan (FMRDP) detailing the transition programs from active mining to eventual mine closure.

9.2    What provisions need to be made for storage of tailings and other waste products and for the closure of mines?

The Mining Act requires a duly approved FMRDP that considers all mine closure scenarios and costs, including maintenance and monitoring, and employee and other social costs, including residual care, if necessary, over a 10-year period, and the creation of a Final Mine Rehabilitation and Decommissioning Fund with a government depository bank. During mining operations, other funds are required to be set up for contingent liabilities and rehabilitation, compensation for damages from mine wastes and tailings, and monitoring expenses.

9.3        What are the closure obligations of the holder of a reconnaissance right, exploration right or mining right?

Please see question 9.2 above.

9.4        Are there any zoning or planning requirements applicable to the exercise of a reconnaissance, exploration or mining right?

Under the Mining Act, its IRR, and EO No. 79, there are areas where mining applications are not allowed, as follows:

  1. areas covered by valid and existing mining rights and mining applications;
  2. old growth or virgin forests, designated watershed forest reserves, wilderness areas, mangrove forests, mossy forests, national parks, provincial and municipal forests, tree parks, greenbelts, game refuges, bird sanctuaries and areas designated as marine reserves, marine parks and tourist zones as defined by law and identified initial components of the National Integrated Protected Areas System (NIPAS), and other laws;
  3. areas excluded by the DENR Secretary based, among others, on assessed environmental impact and sustainable land use implications;
  4. offshore areas within 500 metres of the mean low tide level and onshore areas within 200 metres of the mean low tide level along the coast; and
  5. areas expressly prohibited by law.

EO No. 79 expanded the list of areas closed to mining applications, thus:

  1. prime agricultural lands, in addition to lands covered by the Comprehensive Agrarian Reform Law, including plantations and areas devoted to valuable crops, and strategic agriculture and fisheries development zones and fish refuge and sanctuaries declared as such by the Department of Agriculture Secretary; and
  2. tourism development areas, as identified in the National Tourism Development Plan; and other critical areas, island ecosystems and impact areas of mining as determined by current and existing mapping technologies, that the DENR may identify.

Thus, as long as the mining area applied for is not closed to mining applications, mining activities may be allowed thereon.

While the Local Government Code of the Philippines authorises the local government units (LGUs) to classify real properties as residential, agricultural, commercial, industrial, mineral, timberland or special in accordance with their zoning ordinances, there is nothing which requires that a mining area be classified first as mineral land prior to the conducting of mining activities.


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10. Native Title and Land Rights

10.1 Does the holding of native title or other statutory surface use rights have an impact upon reconnaissance, exploration or mining operations?

Yes.  The IPRA and the Mining Act recognise the priority rights of ICCs/IPs to develop, control and use ancestral lands and territories, and thus the requirement to obtain their Free and Prior Informed Consent (FPIC).  To be able to obtain such FPIC, the minimum agreed royalty payment may not be less than 1% of the gross output.  That royalty shall form part of a trust fund managed and utilised by the ICCs for their socioeconomic wellbeing.

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11. Health and Safety

11.1 What legislation governs health and safety in mining?

The Mining Act requires strict compliance by all contractors and permittees with DENR DAO 2000-98 on Mine Safety and Health Standards, which provides rules for the safe and sanitary upkeep of mining operations and waste-free and efficient mine development. The Labour Code of the Philippines also provides for health and safety regulations that are applicable to the mining industry.

11.2. Are there obligations imposed upon owners, employers, managers and employees in relation to health and safety?

Mining employers in the Philippines should give due and equal emphasis to economic and environmental considerations, as well as health, safety, social and cultural concerns.

Also, mining permits and agreements contain a stipulation that the Contractor conform with laws, rules and regulations on labour, safety and health standards. The Mining Act IRR provide that the MGB requires mining contractors/permittees to submit annual Safety and Health Programs. Likewise, the MGB must conduct safety inspections of all mining operations, monitor the Safety and Health Programs and assess the effectiveness thereof.

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12. Administrative Aspects

12.1 Is there a central titles registration office?

The MGB operates a mineral resources database system, including a mineral rights management system, through its Mining Recorder Unit, which provides information and data on: the geology and mineralisation of the Philippines; pending applications for and granted mineral rights; a list of priority projects; a mineral industry profile; environmental data; industry statistics; geologic maps, technical reports, investigations and surveys; mining rules, regulations and policies; and primers on procedures, approvals and incentives for MAs. Interested private parties may visit the MGB’s offices or its website to access these public data.

12.2 Is there a system of appeals against administrative decisions in terms of the relevant mining legislation?

Administrative decisions of the MGB, the EMB and the DENR Secretary are appealable to the Office of the President. A further review can be resorted to with the Judicial Department, i.e. the Court of Appeals and the Supreme Court.

For mining disputes involving rights to mining areas, MAs, FTAAs or permits, surface owners, occupants and claimholders/concessionaires, the Panel of Arbitrators in the DENR Regional Offices has exclusive and original jurisdiction thereon. The Panel’s decision may be appealed to the Mines Adjudication Board.

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13. Constitutional Law

 13.1. Is there a constitution which has an impact upon rights to conduct reconnaissance, exploration and mining?

Yes. The Constitution states that all natural resources, which include mineral resources, are owned by the State and that the exploration, development, and utilisation thereof shall be under the State’s full control and supervision. The State may directly undertake such activities, or it may enter into MAs or FTAA with Qualified Persons, as defined in question 3.1.

13.2 Are there any State investment treaties which are applicable?

The Philippines has 32 bilateral investment treaties (BITs) with various countries that require the government to protect foreign investments, including those in mining projects.

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14. Taxes and Royalties

 14.1. Are there any special rules applicable to taxation of exploration and mining entities?

Mining companies are subject to income taxes, excise taxes, VAT, documentary stamp taxes, other imposts, and customs duties. Mining activities are also subject to the annual local business taxes, real property tax and occupation fees.

Mining proponents may also avail themselves of fiscal and non-fiscal incentives under the Mining Act and incentives for capital equipment under the Omnibus Investments Code, upon prior registration with the Board of Investments under its Investments Priorities Plan (IPP).

14.2 Are there royalties payable to the State over and above any taxes?

A royalty of not less than 5% of the market value of the gross output of the minerals/mineral products is paid to the government if the mining area falls within a mineral reservation

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15. Regional and Local Rules and Laws

 15.1. Are there any local provincial or municipal laws that need to be taken account of by a mining company over and above National Legislation?

LGUs such as provinces or municipalities may enact ordinances that may apply to mining activities and companies operating in their localities. There are limits to these ordinances, as they need to conform to the Constitution and should not contravene national laws such as the Mining Act.14.2 Are there royalties payable to the State over and above any taxes?

A royalty of not less than 5% of the market value of the gross output of the minerals/mineral products is paid to the government if the mining area falls within a mineral reservation.

15.2. Are there any regional rules, protocols, policies or laws relating to several countries in the particular region that need to be taken account of by an exploration or mining company?

There are none.

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16. Cancellation, Abandonment and Relinquishment

 16.1. Are there any provisions in mining laws entitling the holder of a right to abandon it either totally or partially?

The Mining Act allows EP holders to relinquish the whole or a portion of the permit area. It also allows mining contractors of MAs and FTAAs to withdraw from or abandon their rights thereto if, in their judgment, the mining project is no longer economically feasible, even after they have exerted reasonable diligence to remedy the cause or situation. The mining contractor must, however, continue to comply with and satisfy all of its financial, fiscal, environmental and legal obligations under the contracts.

16.2. Are there obligations upon the holder of an exploration right or a mining right to relinquish a part thereof after a certain period of time?

An EP holder, holding more than 5,000 hectares, shall annually relinquish at least 20% of the permit area during the first two years of exploration and at least 10% of the remaining permit area annually during the extended Exploration Period.

For FTAAs, during the Exploration Period and Pre-Feasibility Study Period, the Contractor shall relinquish part or parts of the contract area up to at least 25% thereof and at least 10% of the remaining contract area annually during the extended Exploration Period and Pre-Feasibility Study Period. Each Mining Area after final relinquishment shall not exceed 5,000 hectares.

16.3.   Are there any entitlements in the law for the State to cancel an exploration or mining right on the basis of failure to comply with conditions?

Yes. A violation of any of the terms and conditions of a Mining Permit/MA/FTAA is grounds for cancellation thereof. The other grounds are:

  1. falsehood or omission of facts in the mining application;
  2. non-payment of taxes and fees due the government for two consecutive years;
  3. failure to perform all other obligations, including abandonment, under the permits or agreements; and
  4. violation of existing laws, policies, rules and regulations.

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