The 7th PH-EITI report, industry outlook transparency for oil, gas and mineral resources (Part 1)
by Marcelle P. Villegas - September 01, 2021
The PH-EITI National Conference 2021 was held last July 29 with the theme "Resiliency in Transparency".
PH-EITI or Philippine Extractive Industries Transparency Initiative, is a government-led, multi-stakeholder initiative that implements EITI. The initiative started on 26 November 2013 under Executive Order No. 147, series of 2013. It is a government commitment first announced through EO No. 79, s. of 2012. The initiative aims to promote the open, accountable management and good governance of oil, gas and mineral resources industries. The three-hour webinar/conference featured various keynote speakers.
“This is the second year that we are holding this meeting online due to the pandemic. This underscores the exceptional circumstance under which we have to operate into the foreseeable future. Nevertheless, I congratulate the EITI for its efforts to organize this national conference and produce an annual report despite all the challenges.” This was part of the Opening Remarks given by Hon. Carlos G. Dominguez, Secretary of Department of Finance.
He defended the importance of the extractive industries like mining despite the common belief of some groups that these are bad for the environment. “By their nature, the extractive industries involve multi-faceted and complex issues. It is easy to merely brand extractive practices as harmful to the environment. Regulations must ensure the balance between economic and environmental concerns to realize the best outcomes for our people.”
Sec. Dominguez explained that EITI helps in achieving that balance by providing fair and accurate data about the extractive industries by describing it as a credible source of information to aid policymakers on the proper fiscal regime for mining.
“…EITI enables the productive exchange of information and positive dialogue among stakeholders. This clears the air of misinformation… The most important value we need to uphold at all times is transparency. Without this, there will be constant suspicion and all sorts of unfounded claims… Increased accountability will improve governance of the sector and management of natural resources.”
Sec. Dominguez mentioned that data transparency not only builds public trust but also brings institutional and sectoral resilience. Such resilience leads to better coordination, appropriate interventions and greater agility in times of crises.
Other speakers in the forum include Hon. Jose "Joey" Salceda who gave a Keynote Speech. He is the Representative of Second District of Albay and Chair of the House of Representatives Committee on Ways and Means.
“Key findings of the Seventh PH-EITI Report” was discussed by Hon. Bayani H. Agabin, who is the Undersecretary of Department of Finance and Chair of Philippine EITI.
“Industry Outlook” was reported by Hon. Ma. Teresa S. Habitan. She is the Assistant Secretary of Department of Finance and the Alternate Chair of Philippine EITI.
The Executive Director of Chamber of Mines of the Philippines, Atty Ronald Recidoro, reported “The Social Development and Management Program”.
“The National Wealth Shares Portal” was the topic of Mr Rainier H. Diaz, Chief Budget and Management Specialist of the Department of Budget.
“Mainstream Action Plan” was reported by Mr Vincent T. Lazatin, National Coordinator, Bantay Kita - Publish What You Pay Philippines.
“The PH-EITI work plan and progress of EITI implementation” was discussed by Eastwood D. Manlises, National Coordinator, Philippine EITI.
Finally, the closing remarks was delivered by Hon. Dakila Carlo Cua, Governor, Provincial Government of Quirino, and President, Union of Local Authorities of the Philippines.
The event was hosted by Triciah Terada.
Executive Summary and Overview of the 7th PH-EITI Report
The Seventh PH-EITI Report covers data from fiscal year 2019 and the early part of 2020. The goals of the report are the following:
1. Show direct and indirect contribution of extractives to the economy (through EITI process);
2. Improve public understanding of the management of natural resources and availability of data;
3. Strengthen national resource management / strengthen government systems;
4. Create opportunities for dialogue and constructive engagement in natural resource management in order to build trust and reduce conflict among stakeholders; and
5. Pursue and strengthen the extractive sector’s contribution to sustainable development.
As an outlook, the Philippines started to implement the EITI for eight years from its membership. Of note, the Philippines was the first to successfully obtain a Satisfactory Progress assessment in 2017. Since 2013, the PH-EITI has been publishing reports yearly. 
From their outlook report, they mentioned that 2019 is a notable for the Mining and Quarrying (MAQ) Industry for two reasons.
1. The industry’s share in Gross Domestic Product (GDP) decreased by PHP1.7 billion to 0.83% due largely to several mines closing. This was despite the fact that the Philippines’ GDP increased by PHP1.3 trillion.
Analysis: As presented in Chart 1 in line with the rest of the data from the Philippines Statistics Authority (PSA), the average annual growth rate (AAGR) of the country’s GDP from 2013 was 8.4%, and it was consistently increasing every year with 2018 being the highest at 10%. Even so, year-on-year (YOY) growth in MAQ was fluctuating; falling in 2015 to -17%, and eventually peaking in 2017 at 18%. Much of the reason for this fluctuation is the stifling regulation of the extractive industry. As a matter of fact, the substantial drop after 2014 was attributable to “The Philippine Mining Act of 1995 which stipulates that the state owns all mineral resources on public and private lands within the territory and exclusive economic zones of the country. In effect, the act regulated the Philippines’ mineral resource development eventually deliberalizing it. 
2. The second reason is due to the sudden surge of COVID-19 which affected the industry. This was first identified in Wuhan, China in the latter part of 2019. At first, the new disease was not previously seen as a global threat. It was only the following year when the global health emergency began. In the Philippines, the disease led to the implementation of official lockdown in most parts of the country on 17 March 2020.
More on the Extractive Industry
The first chapter of the Seventh Report detailed the top contributors of the extractive industry by region. Its total value addition in 2019 was PHP162 billion. As per Chart 2 with raw values from Philippine Statistics Authority (PSA), the mining sector had the highest gross share, making up almost two-thirds of it. This was followed by oil and gas at 24%, and coal at 14%.
Mining and Quarrying (MAQ) companies contributed much in the nation’s employment rate. They have around 210,961 workers in July 2019.
The report also pointed out that mineral products and non-metallic mineral manufactures comprised 6.6% of total exported commodities which were valued at USD4.9 million. “As far as government revenues from these sectors were concerned, it is worth reiterating that it contributed more than a quarter billion PHP in the form of national and local taxes, fees, and royalties.”
According to Mines and Geosciences Bureau (MGB), there were 50 metallic mines in operation; 10 of which extracted gold, 3 copper, 31 nickel, 3 chromite, and 3 iron. And as per PSA, metallic mining had the biggest contribution to Gross Value Added (GVA) of the MAQ industry at 35%. It also had the greatest gross share in the production value of mining at a little less than 67%.
The Philippines, therefore, has more metals in its production of these commodities.
As for Non-metallic mining, there were more in operation in the same period at 53, 28 are limestone/shale quarries, 3 marble/marblelized limestone, 2 silica, 13 aggregate, 1 dolomite, 3 clay, 1 sand and gravel, 1 volcanic tuff, and 1 greywacke/pozzolan. “With respect to its share in MAQ’s GVA, it stood at a little more than 31%. As a proportion of the mining sector’s volume of gross production, non-metallic mining’s was 33% which, in absolute terms, was almost half of that of metallic mines.”
For oil and gas, covering the fiscal year 2019, Department of Energy (DOE) reported the oil production in the Philippines was all sourced from Galoc, Nido, Matinloc, and Alegria. The report stated that Galoc was the most prolific among the others, comprising 96% of the total extracted at 744,449 barrels. Nido was second at 20,634; then Alegria at 9,468; and Matinloc at 1,542.
According to the report, “…the output from the Malampaya field was not as significant in comparison with these oil fields. Conforming to PH-EITI37, the petroleum service contract operators that voluntarily report to the organization are The Philodrill Corporation, Galoc Production Company WLL, the state-owned PNOC Exploration Corporation (PNOC-EC) of the Philippine National Oil Company (PNOC), Shell Philippines Exploration B.V. (SPEX), and China International Mining Petroleum Company Ltd.”
(to be continued)
Philippine Resources - December 01, 2021
Gas drilling in Recto Bank should push through: Pimentel
Photo credit: Inkl The chair of the House Strategic Intelligence Committee on Tuesday said oil drilling activities in Recto Bank must proceed as scheduled amid rising tensions with China. Surigao del Sur Rep. Johnny Pimentel said the Sampaguita gas field could yield up to USD18.2 billion, or around PHP910 billion, in future royalties for the government, based on a 60 percent net share. “We have no choice but to carry on with the drilling activities because the Sampaguita gas discovery in Recto Bank has the potential to energize the entire national grid – not just Luzon – for the next 20 to 30 years,” Pimentel said. Pimentel said Sampaguita is “an untapped value-changing asset” that would be valuable to the country’s future energy security with up to 4.6 trillion cubic feet of gas, while Malampaya, which has been producing gas for the last 20 years, has only 1.6 trillion cubic feet of residual gas at best. “There is even one study suggesting that the entire Recto Bank has up to 20 trillion cubic feet of potential gas in place,” Pimentel said. The Permanent Court of Arbitration in the Hague ruled in July 2016 that Recto Bank is within the Philippines’ exclusive economic zone, as defined under the 1982 United Nations Convention on the Law of Sea. By virtue of the ruling, Pimentel said the Philippines enjoys absolute rights to exploit all resources in the seamount. Article courtesy of the Philippine News Agency
Philippine Resources - October 18, 2021
Next Malampaya can be found in Mindanao: PNOC EC exec
As the Malampaya natural gas field is drying up, Mindanao might have the indigenous energy resources to energize the country. In a webinar of Davao International Conference 2021 Thursday, PNOC Exploration Corp. (PNOC EC) vice president for upstream operation Jaime Bacud said Mindanao is rich in indigenous resources that can support the country’s energy requirement. Bacud said Mindanao alone has three sedimentary basins waiting for exploration for oil and gas resources. These basins include Agusan, Cotabato, and the Sulu Sea. “We still think that there is natural gas potential for these areas, and it could be where we could find the next Malampaya,” Bacud added. The Malampaya gas field, which supplies around 30 percent of Luzon’s power requirement, is the country’s lone natural gas source. As the government issued a moratorium on new coal projects, Bacud said oil and gas exploration, particularly in Mindanao, could help in the government’s goal to achieve energy independence. “We still have a lot of natural or oil and gas resources that are still untapped. And this could be our way forward to get closer to what we call energy independence,” he added. By Kris Crismundo Article courtesy of Philippine News Agency
Philippine Resources - September 22, 2021
Power firm launches multi-sectoral movement for carbon-neutral PH
Photo credit: Mike Gonzalez - Southern Negros geothermal plant, Negros Oriental, Philippines Racing against time to address the worsening climate change crisis, multi-sectoral representatives have joined a movement initiated by geothermal power leader Energy Development Corporation (EDC) aimed at attaining zero carbon emissions among businesses in the country. EDC, the country’s largest renewable energy producer owned by First-Gen, which operates the 222.5MW Southern Negros Geothermal Plant in Valencia, Negros Oriental, spearheads the movement dubbed Net Zero Carbon Alliance, a media release from the power utility said Tuesday. Launched virtually on Monday, the movement pushes for the country to become carbon neutral, in line with the Department of Energy’s goal to reduce emissions by as much as 75 percent. This is part of the government’s Nationally Determined Contributions to the landmark global United Nations’ Paris climate change agreement or COP 21 (Conference of the Parties). “We are putting into action our revitalized mission in the Lopez Group to ‘forge collaborative pathways for a decarbonized and regenerative future’ by seeking partnerships and synergies with fellow enterprises in the country,” EDC president and chief operating officer Richard B. Tantoco was quoted as saying. The Net Zero Carbon Alliance Program aims to “provide partners with a roadmap to attain carbon neutrality through the sharing of best practices and scaling up of carbon emission offsetting and tracking, as well as assistance in obtaining third-party certification of carbon emissions and offsets, and even access to “green” financing, among many other capacity-building tools,” EDC said in its media release. Partners in the carbon-neutral alliance will be guided by EDC’s experience as a carbon-negative company through its 100 percent renewable energy operations and the protection and restoration of the forests within its geothermal project sites. Partners can also adopt practices from EDC decarbonization mechanisms. The pioneering members of the Net Zero Carbon Alliance include homegrown enterprises ArthaLand property developer, Lopez Group affiliate First Balfour construction company, Drink sustainability communications agency, Silliman University, as well as the local operations of multinational firms Analog Devices, Coca-Cola, Knowles Electronics, and Unilever. “We are extremely excited with the enthusiastic participation of our partners and we are looking forward to working with more and more enterprises in the local business sector as we move toward our common goal of mitigating the global challenge of climate change,” Tantoco said. EDC is the country’s biggest 100-percent renewable energy (RE) company that accounts for over 40 percent of the Philippines’ RE output and serves about 10 percent of the country’s overall electricity demand with its installed capacity of almost 1,500 megawatts (MW). Its 1,181MW geothermal portfolio accounts for 62 percent of the country’s total installed geothermal capacity and has put the Philippines on the map as the world’s third largest geothermal power producer. By Mary Judaline Partlow Article courtesy of the Philippine News Agency
Marcelle P. Villegas - January 22, 2022
Senator De Lima passed a resolution against lifting of open-pit mining ban
Before the year ended, DENR Secretary Roy Cimatu signed the Department Administrative Order (DAO) No. 2021-40 that lifts the ban on open-pit mining. The order was passed last 23rd of December 2021. This covers mining for copper, gold, silver and other complex ores. DENR made this decision with hopes to revive the mining industry so it may once again provide job opportunities in rural areas. This decision was a response to counter the economic downturn that resulted from the global pandemic.
Philippine Resources - January 21, 2022
WIDENING OF LAWTON AVENUE IN TAGUIG CITY FINISHED BY Q2 OF 2022
Photo credit: Department of Public Works and Highways The Department of Public Works and Highways (DPWH) has fast-tracked the widening works at Fort Bonifacio-Nichols Field Road or Lawton Avenue in Taguig City to meet its target completion by the second quarter of 2022. “As the government increases mobility in Metro Manila amid the pandemic, this project is vital in addressing traffic woes experienced by motorists,” said DPWH Secretary Roger G. Mercado during project inspection on Thursday, January 20, 2022, along with Senior Undersecretary Rafael C. Yabut, Assistant Secretary Wilfredo S. Mallari and National Capital Region (NCR) Director Nomer Abel P. Canlas. The road widening has three phases with the 1.34-meter Phase 1 traversing from 5th Avenue to Bayani Road completed and opened to the public on November 17, 2020. “We are keen in expediting the completion of the remaining two phases of the project with Phase 2 covering 1,100 lineal meters from Bayani Road to Philippine Navy and Phase 3 covering 240 lineal meters from Philippine Navy to Pasong Tamo Extension,” said Secretary Mercado. Once fully completed, the 3.1-kilometer, four (4)-lane Lawton Avenue will be converted into a six (6)-lane thoroughfare that can accommodate influx of vehicles traversing the area and will help decongest traffic in nearby Epifanio delos Santos Avenue (EDSA), South Superhighway and C-5 Road. It will also complement the 961.427-lineal meter Bonifacio Global City-Ortigas Center Link Road Project which has improved access to and from the cities of Taguig, Pasig, Makati and Mandaluyong. The widening of the Lawton Avenue is part of the EDSA Decongestion Program, one of the flagship projects of the Duterte administration under the Build Build Build Program.
Philippine Resources - January 19, 2022
Vulco® R67 mill lining rubber compound is revolutionising mine site mill operations
Photo: Inside the discharge end of a ball mill being fitted with spiral lifters and rubber grates. Vulco® R67 mill liners last significantly longer and deliver a measurable reduction in mill downtime, installation and maintenance costs. Vulco® rubber is renowned throughout the mining industry for its exceptional wear life and reliability in mill lining systems. These abrasion- and impact-resistant rubber compounds have been developed with advanced technologies by the Weir Minerals’ team of expert engineers and material scientists who are continually refining Vulco® rubber products to keep them at the forefront of mill lining systems technology. Having identified a need for higher-wearing rubbers for mill lining systems, the material science experts commenced developing an industry leading, premium-grade rubber compound with superior wear life and performance in mill lining applications. The result was the Vulco® R67 rubber – an optimum material which is manufactured with proprietary new compounds and innovative methods of processing to deliver outstanding wear life and longer uptime. Extensive field research, compound testing and site trials were conducted to ensure that it was not only able to withstand severe abrasion in typical mill system applications, but that it is best in class. In fact, it has been the most wear-resistant rubber compound that Weir Minerals has ever developed for mill lining applications. The R67 compound boasts a high hardness, elongation, tensile and tear strength, and is suitable for lifter bars, head/shell plates and grates. When it’s utilised in conjunction with metal cap mill liners, the result is a versatile, economical and efficient product that weighs up to 50% less than steel alone. The added benefit is a lighter product that’s faster, easier and safer to install. Revolutionising wear lining Since its launch in 2018, many mining operators from around the globe have implemented the R67 compound into their mill lining systems. They have reported as much as 20-40% improvement in wear life, which is resulting in fewer mill lining replacements and longer mill campaigns. This reduction in shutdowns has a dual benefit of increased cost savings and improved plant availability. What are the benefits for the mill operators? With a liner that can run significantly longer, operators have experienced a wide range of benefits including: Improved wear life A measurable reduction in mill downtime Increased uptime and processing Easier and safer installations Reduced maintenance costs In addition to this, the mines benefit from having an experienced and dedicated team from Weir Minerals who custom-engineer the liners to suit each mill’s unique requirements for optimal wear life. Global in-field success The R67 elastomer compound is changing the way mills operate - with exceptional results. Extensive global trials and commercial installations in the market have resulted in a number of successful outcomes across a variety of different grinding applications. From mines in the USA to Chile, the R67 has proven its outstanding performance consistently. As an example, a high-grade nickel and copper mining project in the USA had a problem where the liners in one ball mill were wearing out too quickly, leading to continued downtime and reduced processing. They were looking for a product significantly superior to the elastomer that they were using. Initially there was reluctance from the mine, as they had loyalty to their original mill supplier, however after Weir Minerals conducted a series of trajectory simulations and discreet modelling - to optimise the design and deliver the best process performance for the mill, they agreed to trial the R67 liners. At the end of the trial the R67 showed 30-40% better performance than the incumbent liners and the customer installed a full set of R67 liners in their mill. Another trial in the USA took place in an iron ore mine with several dozen ball mills in operation. Here, Vulco® R67 liners delivered a 17% increase in life compared to the failed shell plates from the mine’s original mill lining system supplier. The company was extremely impressed with the results and installed a complete shell liner in their ball mill. Moving to Chile, a copper mine was keen to trial the R67 compound to see if they could improve the wear time of a competitor rubber liner. After a three-month trial, all liners were physically measured showing that the Vulco® R67 liners fully worn wear life projected from the actual wear would be 80% longer compared to the incumbent liners. Another copper processing plant in Chile trialled R67 composite liners in their SAG mill against two other compounds that are commonly used in the industry. After 12 months, there was a 48% and 62% wear life improvement on the other liners – proving that the R67 composite liners could withstand the highly abrasive environment. Helping customers optimise their process As leaders in material technology, Weir Minerals are continuously undertaking research and development to provide best-in-class products to mining customers, while helping them improve their bottom line. When using Vulco® R67 rubber compounds, our customers can feel assured they have a market-leading product that is backed by decades of experience, expertise, and proven effectiveness. This innovative rubber compound not only delivers superior physical and viscoelastic properties but is also a lighter and safer material to use. Where can you find Vulco® R67? Vulco R67® mill liners are made exclusively at Weir Minerals facilities in North and South America, Australia and South Africa, with plans to expand production into more regions in the future.