Mineral resources are governed by the constitutional principle that all lands of the public domain, waters, minerals, and other natural resources are OWNED BY THE STATE, and that their exploration, development, and utilization shall be under the full control and supervision of the State. The State may undertake such activities directly, or enter into co-production, joint venture, or production-sharing agreements with Filipino citizens or corporations at least sixty percent (60%) of whose capital is Filipino-owned; the Constitution separately allows the President to enter into agreements with foreign-owned corporations involving technical or financial assistance for large-scale exploration, development, and utilization, subject to the conditions it prescribes. The mining law implements this through several instruments. The MINERAL PRODUCTION SHARING AGREEMENT (MPSA) gives the contractor the exclusive right to conduct mining operations within a contract area, with the government receiving a share; the CO-PRODUCTION and JOINT VENTURE agreements are the other agreement forms; and the FINANCIAL OR TECHNICAL ASSISTANCE AGREEMENT (FTAA) is the vehicle for large-scale projects with foreign participation. Lesser instruments include the EXPLORATION PERMIT, which confers the right to explore but not to extract commercially; the QUARRY PERMIT for quarry resources, generally issued at the provincial level; and small-scale mining permits under the separate small-scale mining law. Every mining right carries conditions that are frequently the real constraint. An ENVIRONMENTAL COMPLIANCE CERTIFICATE is required, mining being an environmentally critical project, along with an environmental protection and enhancement program and a final mine rehabilitation and decommissioning plan with funded guarantees. Areas are CLOSED TO MINING where the law says so, including in military and government reservations, near or under public or private buildings without consent, in old growth or virgin forests, proclaimed watershed forest reserves, and other protected areas. Where the area falls within ancestral domains, the FREE AND PRIOR INFORMED CONSENT (FPIC) of the indigenous cultural community is indispensable under the IPRA, and mining without it is void. Local government concurrence and social development commitments to host communities are likewise required. So minerals are State-owned and extracted only under an MPSA, FTAA, or permit, subject to environmental clearance, closed areas, FPIC, and community obligations.
The Regalian Doctrine
All minerals and natural resources are OWNED BY THE STATE, with exploration and development under the State's full control and supervision — directly, or through agreements with Filipino citizens or corporations at least 60% Filipino-owned. The President may separately enter into technical or financial assistance agreements with foreign-owned corporations for large-scale projects.
The Instruments
- MPSA — the exclusive right to mine a contract area, with a government share;
- Co-production and joint venture agreements;
- FTAA — for large-scale projects with foreign participation;
- Exploration permit — explore, but not extract commercially; and
- Quarry permits and small-scale mining permits.
Environmental Conditions
Mining is an environmentally critical project: it requires an Environmental Compliance Certificate, an environmental protection and enhancement program, and a final mine rehabilitation and decommissioning plan with funded guarantees.
Closed Areas and FPIC
Areas CLOSED to mining include military and government reservations, areas near or under buildings without consent, old growth or virgin forests, proclaimed watershed forest reserves, and protected areas. Within ancestral domains, the FREE AND PRIOR INFORMED CONSENT of the indigenous community is indispensable under the IPRA — mining without it is VOID. LGU concurrence and social development commitments are also required.
Frequently Asked Questions
Who owns minerals in the Philippines? The State. All minerals and other natural resources are owned by the State, and their exploration, development, and utilization are under its full control and supervision.
What is an MPSA? A Mineral Production Sharing Agreement, under which the contractor has the exclusive right to conduct mining operations within a contract area and the government receives a share of the production.
Can a foreign company mine in the Philippines? Only through the constitutionally prescribed route, principally a Financial or Technical Assistance Agreement entered into by the President for large-scale exploration, development, and utilization, subject to the conditions the Constitution prescribes.
Is indigenous consent required for mining? Yes. Where the area falls within ancestral domains, the free and prior informed consent of the indigenous cultural community is indispensable under the IPRA, and mining without it is void.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you have questions about your rights or options under Philippine law, our firm is available to assist. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.