PH-EITI prepares ARMM before Bangsamoro law passage

Zamboanga City– The passage of the Bangsamoro Basic Law has long missed its deadline last August 18, but there is another deadline looming over the Autonomous Region of Muslim Mindanao (ARMM) in the coming months: the first Extractive Industries Transparency Initiative (EITI) report this December.

While the government and the Moro Islamic Liberation Front (MILF) are studying the draft of the Bangsamoro law, The Philippine Extractives Industries Transparency Initiative (PH-EITI) is equipping civil society organizations (CSOs) in ARMM with knowledge on the country’s candidature to EITI, an international standard on transparency and accountability in the extractive sector.

The Philippine EITI briefings for CSOs and Government Stakeholders in the ARMM were held on August 12 at the St. Joseph Retreat House, Cotabato City and on August 20 at the LM Metro Hotel, Zamboanga City, and was led by the Alternate Forum for Research in Mindanao (AFRIM), Inc., Bantay Kita, Cotabato State Polytechnic College, and Social Action Center – Zamboanga.

“ARMM will face a new fiscal regime that will change the way the local government units manage their natural resources. It is an imperative that the communities are informed of their rights and their responsibilities in maximizing their income and revenues,” said Dr. Cielo Magno, national coordinator of Bantay Kita, a coalition of organizations pushing for transparency and accountability in the extractive industry.

The Bangsamoro Basic Law defines new allocation schemes for the exploration, development, and exploitation of all the natural resources within the Bangsamoro. Non-metallic minerals such as sand, gravel, and quarry resources shall belong to the Bangsamoro and its local government units. Metallic minerals within the Bangsamoro, seventy-five percent (75%) shall belong to the Bangsamoro, and twenty-five percent (25%) shall go to the central government. Income from fossil fuels such as petroleum, natural gas and coal, and uranium shall be shared between the Central and Bangsamoro governments.

Aside from the current taxes that the ARMM government collects, capital gains tax, estates tax, documentary stamp tax, and donor’s tax may also be collected by the Bangsamoro once the law is passed. The revenues from these taxes will go to the Bangsamoro treasury and seventy-five percent (75%) of the national taxes, fees, and charges will also go to Bangsamoro while twenty-five percent (25%) will go to the Central government.

Thus, one of the main concerns in the passage of the Bangsamoro law is the transparency and accountability in the management of incentives, special funds, and the region’s mineral potential. With this in mind, PH-EITI emphasizes ARMM’s contribution to the country’s need for a credible and comprehensive EITI report.
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Some of the recommendations and observations provided for by PH-EITI are the examination of audit and assurance procedures, assessment on comprehensiveness and reliability of data, identification of gaps and weaknesses in the reporting procedure, and documentation of auditing of financial statements.

The briefings were supported by the British Embassy and the Australian Agency for International Development (AusAID).