Report on the 4th PH-EITI National Conference

The conference aimed to discuss the results and highlights of the 2nd PH-EITI Country Report. The specific objectives of the activity were to present the findings of the second PH-EITI report to relevant stakeholders, have a national dialogue on policy gaps and systemic issues pertaining to regulation and governance of the sector, and collectively produce a set of recommendations to address the above gaps and issues and improve EITI implementation in the Philippines. The conference was attended by approximately 200 people, with the biggest delegation coming from the national government, comprising more than a third of the total population of attendees. The private sector, local government units, and civil society organizations were also well-represented. The expected deliverables and outputs from the national convention and workshop included a conference documentation report, a list of priority issues that the government agencies will commit to act upon based on the findings of the first and second EITI report, a set of recommendations collectively formulated by all sectors to address gaps in government systems as surfaced by the report, and a list of recommendations on how to improve EITI implementation. The 2nd PH-EITI Country Report was submitted to the EITI International Secretariat on December 30, 2015. The report has two volumes: Volume 1, which provides contextual information on the extractive sector and the Reconciliation report, and Volume 2, which includes disclosures beyond the EITI Standard. The report highlights the legal framework and fiscal regime of the mining, oil, and gas sectors, the contribution of the extractive industry to the economy, state participation in the extractive industries, and the distribution of revenues from extractive industries. The report also presents the findings of the Reconciliation report, which covers 24 participating material companies, 12 non-material companies, 7 government agencies, and 59 local government units. The report reveals that 87% of total revenues in the mining, oil, and gas sectors are covered by the report, with a total reconciled collection for 2013 of Php 40,699,726,417. The report also highlights the agencies with the least amount of discrepancy, including the Department of Energy (DOE) and the Bureau of Internal Revenue (BIR), and the entities with the highest percentage of unexplained variance, including the National Commission on Indigenous Peoples (NCIP) and local government units (LGUs). The report also presents the findings of the SDMP review of 25 large-scale metallic companies, which reveals that 7 companies spent more than 100% of the allocated amount for SDMPs for certain years, 6 companies had annual utilization rates lower than 50% of the allocated amount for a particular year, and 11 companies had unspent funds from their SDMP budgets for the preceding years. A comparison of the 1st and 2nd EITI Reports reveals that higher figures were recorded in the first EITI report covering 2012 data, compared to the 2nd report. The lower revenue can be explained by the low prices of commodities for the year covered. The report also reveals that there is a lower discrepancy between the reported payments of the companies and reported collection of government agencies in 2013, compared to 2012. The reported variance for 2013 is Php 2.7 million, which is only 0.01% of total reconciled revenue streams, while there was a variance of Php 58.2 million or 0.11% of reconciled revenue streams in 2012, a 95% decrease in variance and thus an improvement from 2012 to 2013. The Department of Budget and Management (DBM) has taken swift action to address the recommendations of the MSG, including amending some of their forms and online reports to include all the information needed by LGUs with respect to their shares in national wealth. The Bureau of Internal Revenue (BIR) has also taken steps to address the recommendations, including proposing amendments to the National Internal Revenue Code (NIRC) to make EITI reporting an exception to the confidentiality provision and disaggregating the reporting of final withholding taxes and revising current recording systems and BIR forms.