Japanese firms wary of new mining rules
Japanese businesses are raising concerns over new government rules that could require mining operators to surrender privately owned equipment and other assets when their contracts expire, warning that the policy could discourage investments in the Philippines.
In a position paper dated 30 October, the Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI) urged the Department of Energy (DOE) and Department of Environment and Natural Resources (DENR) to clarify the asset-turnover requirement under Joint Administrative Order (JAO) No. 2026-01.
The chamber questioned Section 6.10 of the order, which requires operators to surrender certain assets upon contract expiration.
“The Japanese Chamber of Commerce and Industry of the Philippines, Inc. (JCCIPI) wishes to express its concerns regarding DOE–DENR Joint Administrative Order (JAO) No. 2026-01, particularly its provisions on asset turnover by existing operators participating in bidding processes for mining and resource contracts,” the group said.
JCCIPI represents nearly 700 Japanese companies and affiliated organizations operating in the Philippines, whose members collectively employ more than 300,000 Filipinos.
JCCIPI President Shigeru Shimoda signed the position paper.
According to the group, requiring companies to surrender privately owned assets could weaken their financial position, limit borrowing capacity and affect future investments.
It argued that recovering the cost of equipment through depreciation or amortization does not automatically transfer ownership to the government.
The chamber also raised concerns over changes in bidding requirements, noting that some of its members had participated in previous auctions without being required to surrender their equipment.
It said the new requirement could put existing operators at a disadvantage, particularly those that had invested heavily under their current contracts.
While acknowledging that contract renewals should not be automatic, JCCIPI maintained that bidding rules must be clear, consistent and applied equally to qualified participants.
The group also sought clarification on how the order aligns with existing laws, including the Philippine Mining Act and Presidential Decree No. 972, as amended.
JCCIPI warned that uncertainty over asset ownership could discourage companies from participating in future auctions and weaken investor confidence in the country’s mining industry.
To address these concerns, the chamber urged the government to clarify whether operators must surrender privately owned trucks, heavy equipment and other operational assets when renewing or bidding for contracts.
It also called for a review of the policy’s potential impact on company valuations, borrowing capacity, and shareholder value, along with consultations with affected businesses.
“JCCIPI believes that clarification of these provisions would help ensure that the implementation of the JAO supports the Government’s resource-development objectives while maintaining a predictable environment for existing and prospective investors,” the chamber said.
The group stressed that clearer rules would help protect existing investments while supporting the government’s resource development goals.