Subnational transfers: Philippines

The Philippines’ 2012 EITI Report found that local governments were not able to quantify how much they receive from the extractive companies.

In the Philippines, local governments are entitled to receive a 40% share of three key revenue streams collected by the central government: royalty income from mineral reservations, energy resources production, and mining taxes. The 2012 EITI Report found that the central revenue collection agencies were not able to provide information on the contribution of each payment stream from the mining sector, but lumped these transfers together with other payments before distributing them to local governments. This limited the ability of local governments to assess the value, impact and desirability of mining activity in their area.

The 2012 EITI report recommended that the relevant government agencies and the Department of Budget and Management should monitor and report on such transfers, disaggregated by local government and revenue streams.

To follow up on this recommendation, the government agencies, coordinated by the Cabinet-level Mining Industry Coordinating Council (MICC), have taken actions to ensure disclosure of information about the share of revenues that local governments are entitled to:

  • The Department of Budget and Management has committed to disclose disaggregated information to local governments to enable local governments to see how much they are receiving from each company. 
  • Rules for streamlined disbursement of local government funds starting with the 2016 Budget should both quicken disbursements and improve local governments’ oversight and planning capacity.