Natural Resources: The Extractive Commons
How royalties on mining, offshore extraction, fisheries, and forestry can fund ₱300 Billion annually — and protect Philippine natural wealth for future generations.
The Philippines’ Natural Wealth
The Philippines is extraordinarily resource-rich:
- Minerals: The Philippines holds one of the world’s largest deposits of nickel, chromite, copper, and gold. Mindanao and Palawan are estimated to contain mineral wealth worth trillions of pesos.
- Oil and Gas: The Malampaya gas field (now entering depletion), Recto Bank/Reed Bank, and other South China Sea formations contain significant hydrocarbon reserves.
- Fisheries: The Philippines’ 2.2 million square kilometers of Exclusive Economic Zone is among the world’s most biologically productive.
- Forests: Despite severe historical deforestation, remaining forests provide watershed protection, biodiversity, and timber value.
Under current law, these resources are exploited by private concession-holders who pay royalties and taxes far below the value of the resources extracted. The result: mining companies generate enormous profits; local communities bear the environmental costs; ordinary Filipinos receive minimal benefit.
The Mechanism
Natural Resource Royalties are annual or per-extraction charges on:
- Mining (nickel, copper, gold, chromite, coal): A royalty of 10–25% of gross extraction value, replacing the current 5% royalty.
- Offshore extraction (oil, gas, geothermal): A resource rent tax of 30–40% on economic rents (above-normal profits).
- Fishery rights: Competitive auction of commercial fishing licenses in Philippine waters; municipal fisheries exempt for subsistence fishers.
- Forestry: Royalties on commercial logging concessions; reforestation bonds tied to concession value.
Estimated Revenue
| Resource | Current Revenue | Market-Rate Royalty |
|---|---|---|
| Mining royalties | ~₱20 Billion | ~₱150 Billion |
| Offshore extraction | ~₱30 Billion | ~₱100 Billion |
| Commercial fisheries | ~₱5 Billion | ~₱30 Billion |
| Forestry | ~₱2 Billion | ~₱20 Billion |
| Total | ~₱57 Billion | ~₱300 Billion |
Environmental Incentives
Natural resource royalties are not only a revenue tool — they are an environmental policy tool:
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Internalize extraction costs: Mining and drilling cause long-term environmental damage (acid mine drainage, habitat destruction, groundwater contamination). Higher royalties force companies to internalize these costs or reduce extraction.
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Fund remediation: A portion of natural resource royalties (above the Common Fund floor) is earmarked for environmental remediation of existing mining sites and reforestation programs.
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Protect indigenous rights: Indigenous peoples in mineral-rich regions receive a guaranteed share (through their LGUs and tribal governments) of royalties collected from their ancestral domains.
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Renewable energy transition: As fossil fuel royalties rise, the relative cost advantage of solar, wind, and geothermal energy increases — accelerating decarbonization.
The Democratic Claim
Every Filipino owns a share of Philippine mineral wealth. Under the current system, this ownership is nominal — the benefit flows to concession-holders, politicians who grant the concessions, and their shareholders.
Common Dividend makes this ownership real: natural resource royalties flow into the Common Fund and are distributed to every citizen. The nickel mined in Surigao del Norte enriches not just the mining company and its shareholders, but every Filipino.