President Ferdinand “Bongbong” Marcos Jr. on Thursday signed into law Republic Act (RA) 12253, or the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, aimed at ensuring the government secures a more equitable share of revenues from the country’s vast mineral resources.
The signing ceremony took place at Malacañan Palace, with Marcos declaring that the law simplifies and strengthens the fiscal framework for the mining sector while balancing public interest, industry growth, and environmental protection.
“Around the world, the demand for minerals is surging. These minerals are needed to service the new technologies, for batteries, solar panels, other vital components of clean energy. Some even call these resources as the building blocks of a green and digital economy. We are blessed because the Philippines is resources in such resources,” Marcos said in his keynote speech.
He stressed that the measure is not only about revenue collection but also about fairness.
“With the signing of the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, we are putting into place a system that is fairer, that is clearer and more responsive to the needs of both our people and the environment,” Marcos added.
KEY PROVISIONS OF RA 12253
- Estimated Revenue Impact: ₱25.08 billion from 2026 to 2029, averaging ₱6.26 billion annually.
- Royalty Rates: A 5-tier, margin-based royalty system ranging from 1% to 5% on income from mining operations outside mineral reservations; a minimum 0.1% royalty on gross output for mines below threshold.
- Windfall Profits Tax: A 5-tier system ranging from 1% to 10%.
- Debt-to-Equity Cap: 2:1 thin capitalization rule to curb tax-deductible borrowing abuses.
- Ring-Fencing Rule: Prevents mining firms from offsetting losses of one project against profits from another.
- Tax Clarifications: Retains existing 25% corporate income tax, 4% excise tax, 5% royalty inside mineral reservations, and at least 1% royalty for indigenous peoples. Local business tax clarified at 0.5%.
- Transparency Measures: Requires public disclosure of mineral sales, exports, and revenues; mandates independent auditing; creates a multi-stakeholder accountability group.
- LGU Revenue Disbursement: Streamlines distribution of mining tax shares to local governments.
- Research & Development Fund: 10% of royalties from mines inside mineral reservations earmarked for exploration, valuation labs, and Bureau of Internal Revenue (BIR) tools.
The Marcos administration argues that the law will reduce leakages, increase state revenue, and strengthen governance in the mining industry while safeguarding communities and ecosystems. It also integrates natural capital accounting to assess the true environmental costs of mining under the Philippine Ecosystem and Natural Capital Accounting System.