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)
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Philippine Resources - February 08, 2022
Let biz sector handle Malampaya deal, PRRD tells senators
Photo credit: Shell President Rodrigo Duterte on Friday slammed the Senate resolution recommending charges against Department of Energy (DOE) Secretary Alfonso Cusi and other officials over the approval of what lawmakers alleged was an anomalous sale of shares in the Malampaya gas field. In a statement, Duterte expressed "grave concern" over the Senate's adoption of the resolution, as it casts "undue, undeserved, and unwarranted aspersion" on key DOE officials. "The government values the critical role and contribution of the Malampaya Gas Field to energy security. I will not allow this valuable resource to be jeopardized and embroiled in the political antics of some members of the Senate," he said. Duterte affirmed that Cusi still has his full trust and confidence, and shall remain as the head of the energy department. He maintained that the national interest has been protected and the government's rights remain intact amid the developments involving the share sale and purchase agreement. "I am calling on our legislators to ensure that our ability to compete is not jeopardized by political intrigues and innuendoes. Leave business transactions in the capable hands of the business sector. Let us respect their business decisions while we protect our national interests," Duterte said. The resolution, penned by Senator Sherwin Gatchalian, recommends the filing of criminal and administrative charges before the Office of the Ombudsman and the Civil Service Commission against Cusi and other DOE officials for approving and recommending approval of the Chevron Philippines-UC Malampaya transaction. Gatchalian said the officials violated laws for allegedly railroading the approval to the sale of the 45-percent participating interest in the Malampaya gas project of Chevron Malampaya LLC Philippines, now known as UC 38 LLC, to UC Malampaya, an indirect subsidiary of Udenna Corporation, despite the lack of financial qualification. Duterte, however, said that the sale and purchase of the stock of Chevron Malampaya LLC was a private transaction between private entities that must be respected. He also reiterated that both foreign and local investments are "vital" to the economy. "We compete for them with other countries, and our ability to do so requires me to create and maintain an environment conducive to the entry of investors," he said. Duterte said that while he recognizes the Senate's power to conduct congressional probes in aid of legislation, this should be exercised "with prudence and circumspection, devoid of reckless accusations, and focused on improving existing laws". By Filane Mikee Cervantes Article courtesy of the Philippine News Agency
Philippine Resources - February 17, 2022
DOE reviewing terms of reference to study nat’l oil reserve
Photo credit: Philippine National Oil Company The Department of Energy (DOE) is reviewing the terms of reference (TOR) for the public bidding of consultancy services to do the feasibility study as the government aims its own oil reserve operation. During the Laging Handa briefing Wednesday, DOE Assistant Director Rodela Romero said after the failed bidding in getting an adviser to do a study on the establishment of Strategic Petroleum Reserve (SPR), the agency still targets to finish the study before the end of the Duterte administration. In September last year, the Philippine National Oil Company (PNOC) said it aims the establishment of SPR that will involve crude oil and petroleum importation, storage, and distribution facilities within and outside the country. Romero said the SPR program is a long-term plan and an oil contingency plan that aims to lessen the country’s vulnerability from the impact of supply and price disruptions in the world market. “So (it is an) assurance that we will be able to build the said strategic petroleum reserve through proper analysis, wherein the government will not incur any losses,” she said in Filipino. A few months after the onset of the pandemic, DOE Secretary Alfonso Cusi expressed his intention to build a stockpile of oil to take advantage of low prices of fuel products then, which plummeted below USD20 a barrel. The government aims to buy oil when prices are low, stock it, and use it for domestic consumption when prices are rising. This could be a solution to the present oil price woes, in which prices have been increasing for seven straight weeks now. In a statement last week, senatorial bet and former defense secretary Gilbert “Gibo” Teodoro called on the DOE and the PNOC to fast-track the national oil stockpiling program and be more proactive on energy issues. Moreover, Romero said the DOE has proposed to Congress to give authority to the agency to put up the SPR, “whether commercial or strategic”, to address impacts of oil supply and price disruptions. By Kris Crismundo Article courtesy of the Philippine News Agency
Philippine Resources - February 21, 2022
PEZA woos UAE oil firms to set up refineries in PH ecozones
Photo: Oil Refinery Philippine Economic Zone Authority (PEZA) director general Charito Plaza has invited oil companies in the United Arab Emirates (UAE) to build and operate oil refineries in the country. During the Global Biz with PEZA featuring the United Arab Emirates held in Dubai Tuesday, Plaza said oil companies based in the UAE can look into opportunities in making the Philippines its hub in the Southeast Asian region. “We seek your help to talk with big oil companies here in UAE as we attract them to locate in our island refinery ecozones, so to bring their oil deposits, stock it in the Philippines and have it refined there,” she said. Plaza added UAE firms can take advantage of the ease of doing business as PEZA offers a one-stop shop for processing investments within ecozones and enjoying fiscal incentives and lower corporate income tax rate with the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law. Island refinery ecozone is a new type of ecozone that PEZA is pursuing to help the country secure petroleum needs and lessen its vulnerability from oil supply and price disruptions in the world market. UAE is one of the biggest oil and gas producers in the world with a daily average production of 3 million barrels of petroleum and oil reserves of 100 billion barrels. One-third of its economy depends on its oil and gas industry. Aside from setting up oil refinery ecozones, Plaza said UAE companies may also explore opportunities in establishing halal ecozones, as well as Islamic banking in the Philippines. She said there are only six locators from the UAE in PEZA zones with total investments amounting to PHP383 million and employing 1,049 personnel. By Kris Crismundo Article courtesy of the Philippine News Agency
Philippine Resources - May 26, 2022
Legal framework needed for gov’t to invest in nuclear power plant
Department of Energy (DOE) Undersecretary Gerardo Erguiza Jr. said there is a need to amend the Electric Power Industry Reform Act (EPIRA) to enable the government to invest in nuclear power plants. This, as the incoming administration has expressed its support in considering a nuclear power plant to be part of the country’s energy mix. “As of now, the government does not have the ability to put up conventional nuclear power plant because the National Power Corp. does not have mandate on this,” Erguiza said in Filipino during the Laging Handa public briefing Wednesday. With the privatization of the power sector under the EPIRA, the government could not enter into power generation. “But we can align together, with the drafting or putting up of the regulatory framework, we can amend our laws to include the government among those that can fund a nuclear power plant,” he added. Erguiza said that based on studies of the Korean Hydro Nuclear Power Company of South Korea and ROSATOM of Russia, they have found out that the Bataan Nuclear Power Plant (BNPP) can still be rehabilitated. According to ROSATOM, an investment of around USD3 billion to USD4 billion is needed to revive the BNPP. Presumptive President Ferdinand “Bongbong” Marcos Jr. earlier mentioned that part of his energy agenda is to revive the BNPP to become an additional source of clean and cheap power. On the other hand, Erguiza said the government can invest in power generation using small modular reactors, the latest nuclear energy technology, in missionary areas that are not connected to the grid.
Philippine Resources - May 26, 2022
Dutch gov’t backs SMC, Boskalis in P740 billion Bulacan Airport project
Photo credit: Palafox Dutch gov’t backs SMC, Boskalis in P740 billion Bulacan Airport project San Miguel Corporation (SMC) received its strongest support yet for its game-changing P740-billion New Manila International Airport (NMIA) project in Bulacan following the approval of the Dutch government of an export credit insurance (ECI) for the project’s land development phase. The approval comes after over a year of rigorous review of the project’s long-term environmental and social impact mitigation measures to ensure that the multi-billion project is done with sustainability in mind and aligned with the country’s climate ambitions. The Dutch government, represented by Atradius Dutch State Business (DSB), extended the ECI to Royal Boskalis Westminster N.V., to cover its EUR 1.5 billion contract for land development works at the airport project site in Bulakan, Bulacan. The NMIA project is the largest in Boskalis’ over 100-year history, and is also the largest export credit agency (ECA) insurance policy granted in the 90-year history of Atradius. SMC President and Chief Executive Officer Ramon S. Ang thanked the Dutch government for its support to NMIA, a project seen to catalyze sustainable economic growth for the Philippines, especially post-pandemic. It is seen to deliver over a million jobs to Filipinos. “This is a significant milestone not only for San Miguel and the NMIA project, but for the entire country. With this, we are closer to our dream of having a world-class, future-ready, and sustainably-built international gateway, proudly built by Filipinos for the Philippines. This also validates our work with Boskalis to ensure that this project is done right, and will provide long-term economic, environmental, and social benefits to our host communities and Bulacan province,” Ang said. In a statement posted on Boskalis’ international website, its CEO Peter Berdowski, said: “I am very pleased that all the hard work with a large team of experts has been successfully completed (today). For more than a year, we have worked intensively with Atradius DSB to ensure that the construction of the new airport will take place in a socially responsible manner.” He added: “In collaboration with Atradius DSB, the Dutch embassy, we succeeded in developing a broadly supported plan with an eye for the local community and the preservation of biodiversity. I would like to thank all those involved for their contribution to the positive decision of the State.” In the same statement, Atradius DSB Managing Director Bert Bruning said: “This project is unique on so many levels. Firstly, of course, as a very important contract for our client Boskalis, but also for us, as the largest ECA policy in our 90-year history,” he said. “In addition, I am proud of the fact that together with Boskalis and San Miguel, by keeping up the dialogue, we were able to ensure that the project is to meet international standards in the field of environmental and social conditions. In doing so, we have not only contributed to making this wonderful contract possible built also really made a difference together for the local communities and nature.” As part of the ECI process, a large group of experts from San Miguel, together with Boskalis and four renowned consultancy firms, conducted an extensive environmental and social impact assessment in accordance with the highest international standards. This process also included the conduct of impact analyses and compensation packages for adverse effects of the project. “This shows that the airport project and our environmental and social mitigation plans are not only sound, but robust and strong, given they can pass not only international standards but the exacting requirements of the Dutch government. It is another testament to the ability of Filipinos to be world-class,” Ang said. “We will continue to work with Atradius, the banks, experts, national and local government, and all stakeholders to ensure we will build this project in a sustainable manner and in compliance with the highest international environment and social standards,” Ang reaffirmed. added. The airport project will feature four parallel runways, a world-class terminal, and a modern and interlinked infrastructure network that includes expressways and railways. Article courtesy of San Miguel Corp
Philippine Resources - May 25, 2022
CTPCMC Allocates 7.7M for COVID-19 Initiatives
Article by: Roniel R. Arguillas - CTPCMC ICE Officer BAYANIHAN AMIDST THE COVID-19 BATTLE In order to protect and improve the lives of the people within the host and neighboring communities pursuant to Republic Act (RA) No. 11469 or the “Bayanihan to Heal as One Act”, CTP Construction and Mining Corporation or CTPCMC allocated 7.7 million pesos intended for the implementation of projects, programs, and activities (PPAs) on COVID-19 prevention. Through its Social Development and Management Program (SDMP) under Adlay Mining Project (AMP) and Dahican Nickel Project (DNP) the company implemented essential PPAs in the year 2021. The beneficiaries of PPAs were from the Host and Neighboring communities specifically Barangay Adlay, Barangay Dahican and Municipality of Carrascal. With an allocated budget of P2,060,803.78, a Covid-19 Assistance Center was put up to be the second line of support to the host communities if their existing Isolation Rooms have been fully occupied. The company’s employees and their dependents are to be prioritized in the center. The center is offering services which include free isolation room for those who are identified and confirmed as covid-19 patients, free vitamins, and over-the-counter drugs, 24/7 monitoring by health personnel and stand-by oxygen concentrators. Another PPA was the provision of 59 medical equipment and kits to Barangay Adlay. The provision included pulse oximeter, thermal scanner, LCD full digital ultrasound machine, hospital bed and refrigerator as vaccine storage. The turnover was done on December 14, 2021, held at Barangay Hall of Adlay. It was attended by Engr. Charlo R. Basadre CTPCMC Resident Mine Manager, Charid O. Cuadrillero ComRel Manager, Hon. Norberto O. Rubi Jr. Barangay Captain, and Raquel Bungcaras assigned nurse. “These are very essential and a huge help to the key front liners and to the people within the community.” Hon. Rubi said during the turnover. The company also provided two SDMP Emergency Response Vehicles for health-related emergencies.