President Ferdinand Marcos Jr. on Thursday signed Republic Act 12253, or the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, a law designed to create a “fair, transparent and responsive” tax system for the mining industry.

In a speech, Marcos said the new measure would benefit both the Filipino people and the environment.

“Under this law, the administration and use of funds from mining will be simpler, ensuring that the government has a share of the revenue, promoting a transparent and honest system, and providing security to investors,” he said.

The law requires mining companies operating in designated mineral reservations to pay a royalty fee of 5 percent of their gross output. Companies operating outside these reservations will be subject to a margin-based royalty on their income.

Additionally, a special tax will be implemented if a mining company’s profit margin exceeds 30 percent, ensuring the government receives a fair share of the extra profit.

Marcos also noted that each mining contractor will be recognized as a separate taxable entity. This prevents companies from consolidating the income and expenses of multiple mining projects to lower their tax liability.

The new law is also intended to strengthen the protection of natural resources and ensure that communities affected by mining operations benefit more from the projects.

Special Assistant to the President for Investment and Economic Affairs Frederick Go said the law is a “significant milestone” that will position the country’s mining sector as a key player in the global value chain.

“By modernizing the industry’s fiscal regime, we aim to drive economic growth, especially in support of green technologies, while protecting our environment and natural heritage,” Go said.

He added that the reform will help generate jobs, increase government revenue for public services, and attract responsible investors committed to sustainable development.