NINETEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )

Third Regular Session )

SENATE

______________________________________________________________________
COMMITTEE REPORT NO. ________

Submitted by the Committee on Environment, Natural Resources and Climate Change

(as recommended by the Subcommittee on Proposed Senate Resolution No. 1310) on
___________.

RE: Proposed Senate Resolution No. 1310

Recommending the adoption of the recommendations incorporated therewith

Sponsor: Senator Francis “Chiz” G. Escudero

______________________________________________________________________

MR. PRESIDENT:

The Committee on Environment, Natural Resources and Climate Change to which was
referred Proposed Senate Resolution No. 1310, introduced by Senator Francis “Chiz”
B. Escudero, entitled:

“RESOLUTION
DIRECTING THE SENATE COMMITTEE ON ACCOUNTABILITY
OF PUBLIC OFFICERS AND INVESTIGATIONS (BLUE RIBBON)
TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, ON THE
SUBSTANTIAL NUMBER OF INACTIVE, NON-OPERATIONAL,
INVALID, OR UNUSED EXPLORATION PERMITS AND MINERAL
AGREEMENTS CONTRARY TO THE DECLARED POLICY OF
REPUBLIC ACT NO. 7942, OR THE PHILIPPINE MINING ACT OF
1995";
have considered the same and have the honor to submit its report on its inquiry back to
the Senate, recommending the adoption of the recommendations as contained in this
Report and their immediate implementation.

Respectfully submitted:

Chairpersons:

SEN. CYNTHIA A. VILLAR SEN. FRANCIS G. ESCUDERO

Committee on Environment, Natural Subcommittee on Proposed Senate
Resources and Climate Change Resolution No. 1310
Senate President

Vice Chairperson:

SEN. PIA S. CAYETANO

Committee on Environment, Natural Resources and Climate Change

Deputy Majority Leaders:

SEN. JOSEPH VICTOR G. EJERCITO SEN. MARK A. VILLAR

Committee on Environment, Natural Committee on Environment, Natural
Resources and Climate Change Resources and Climate Change
 Members:

SEN. MARIA LOURDES NANCY S. SEN. ALAN PETER S. CAYETANO

BINAY Committee on Environment, Natural
Committee on Environment, Natural Resources and Climate Change
Resources and Climate Change

SEN. RONALD DELA ROSA SEN. WIN GATCHALIAN

Committee on Environment, Natural Committee on Environment, Natural
Resources and Climate Change Resources and Climate Change

SEN. CHRISTOPHER LAWRENCE T. SEN. MANUEL M. LAPID

GO Committee on Environment, Natural
Committee on Environment, Natural Resources and Climate Change
Resources and Climate Change

SEN. LOREN LEGARDA SEN. IMEE R. MARCOS

Committee on Environment, Natural Committee on Environment, Natural
Resources and Climate Change Resources and Climate Change
SEN. ROBINHOOD C. PADILLA SEN. RAMON BONG REVILLA JR.
Committee on Environment, Natural Committee on Environment, Natural
Resources and Climate Change Resources and Climate Change

SEN. RAFFY T. TULFO SEN. JOEL VILLANUEVA

Committee on Environment, Natural Committee on Environment, Natural
Resources and Climate Change Resources and Climate Change

Minority Leader:

SEN. RISA HONTIVEROS

Committee on Environment, Natural Resources and Climate Change

Ex Officio Members:

SEN. JINGGOY EJERCITO ESTRADA SEN. FRANCIS N. TOLENTINO

Committee on Environment, Natural Committee on Environment, Natural
Resources and Climate Change Resources and Climate Change
 SEN. AQUILINO PIMENTEL III
Committee on Environment, Natural Resources and Climate Change

I. INTRODUCTION

Section 2, Article XII of the 1987 Constitution declares that all natural resources
are owned by the State, which shall exercise full control and supervision in their
exploration, development, and utilization. Republic Act No. 7942, or the Philippine
Mining Act of 1995, implements this constitutional directive by establishing a legal
framework for the rational and sustainable development of the country’s mineral
resources, in partnership with the private sector, and consistent with the protection
of the environment and the rights of affected communities.

Pursuant to this policy, the State, through the Department of Environment and
Natural Resources (DENR) and its Mines and Geosciences Bureau (MGB), is
authorized to issue mineral tenurial instruments such as Exploration Permits (EPs)
and Mineral Production Sharing Agreements (MPSAs). These instruments are
granted to qualified applicants with the financial and technical capacity to
undertake mining operations in accordance with environmental laws and technical
standards.

To reinforce transparency, accountability, and performance-based tenure,

Executive Order No. 79, s. 2012, mandated the review of existing mining
operations and the rationalization of inactive or non-performing mining tenements.
This policy is further supported by DENR Memorandum Order No. 99-10, which
imposes requirements on permittees and contractors to demonstrate capability
and compliance through approved exploration, development, and environmental
work programs.

Despite the existence of this regulatory framework, recent official data raise
concerns over the effectiveness of its implementation. As of 31 December 2024,
only 45 of the 150 issued EPs were reported to be valid and existing, leaving 105
 permits inactive or unused. Likewise, as of 31 January 2025, only 248 of the 378
MPSAs were active and operational, while the remaining 130 were inactive or non-
performing. These dormant tenements hinder the government's ability to reallocate
mineral areas to qualified and capable applicants, thereby contributing to the
inefficient utilization of the country's mineral resources.

This situation carries significant economic, environmental, and fiscal implications.

The mining sector’s contribution to the gross domestic product stood at only 0.71%
in 2024, while it accounted for merely 0.54% of total employment as of November
of the same year. The total revenue generated from taxes, fees, and royalties in
2023 amounted to Php 41.7 billion—equivalent to just 1.2% of the national tax
collection—despite the Philippines being among the most mineralized countries
globally, with an estimated US$1 trillion in untapped reserves of gold, copper,
nickel, and other minerals.

The existence of a significant number of inactive, non-operational, or invalid

exploration and mineral agreements undermines the objectives of Republic Act
No. 7942. It restricts the entry of new investments, weakens regulatory oversight,
and prevents the full realization of mining’s potential contribution to sustainable
national development. There is, therefore, a pressing need to examine the
performance, status, and enforcement of existing mineral tenements and the
policies governing their administration.

Accordingly, it is imperative to direct an inquiry, in aid of legislation, into the

circumstances surrounding these inactive and non-performing EPs and MPSAs.
The objective is to identify legal, institutional, or procedural gaps; determine
accountability; and recommend appropriate legislative or policy interventions to
strengthen the governance of the mining sector in accordance with constitutional
and statutory mandates.

II. COMMITTEE ACTION

Following the public hearing conducted on 03 March 2025 by the Committee on

Environment, Natural Resources and Climate Change (Subcommittee on
Proposed Senate Resolution No. 1310), chaired by Senator Francis “Chiz” G.
Escudero, and in view of the issues raised concerning the substantial number of
inactive, non-operational, invalid, or unused exploration permits (EPs) and mineral
production sharing agreements (MPSAs), the Committee has the following actions:
 1. The Committee directs the DENR to review forest lands for possible
reclassification into alienable and disposable lands of the public domain, in
relation to the State’s interest to increase its contribution in the GDP.

2. The Committee directs the DENR, through the Mines and Geosciences
Bureau (MGB), to submit a comprehensive inventory of all EPs and MPSAs,
indicating the following:
a. Date of application, approval, and validity period;
b. Date and frequency of extensions or renewals, if any;
c. Justifications provided for such extensions;
d. Identification of EPs and MPSAs exceeding the eight (8)-year validity
period;
e. Status of operations on the ground, including costs incurred and any
pending legal cases;
f. Classification of MPSAs (whether directly issued or matured from
EPs), with corresponding status reports; and
g. Identification of permits with expired or violated conditions, and
recommended enforcement actions.

3. The Committee instructs DENR to review of Republic Act No. 7942 and its
implementing rules and regulations, particularly on the following matters:
a. Section 25 on the Transfer or Assignment of exploration permits;
b. Extension or renewal timelines and the allowable grounds therefor;
c. Financial and technical requirements for permit applicants, including
appropriateness of capital thresholds in relation to the size of the
applied area;
d. Procedures for resolving overlapping land titles and claims within
mineral tenements;
e. Conditions and enforcement mechanisms for permit compliance;
f. The feasibility of securitizing mineral resources or treating them as
future commodities, including potential roles for the Maharlika
Investment Corporation in exploration financing.

4. The Committee supports the policy direction to recommend cancellation of

EPs and MPSAs which remain inactive or non-performing beyond the
allowable period, absent legally or technically sufficient grounds.

III. CONCLUSION
 The Committee on Environment, Natural Resources, and Climate Change, through
its Subcommittee on Proposed Senate Resolution No. 1310, has identified a
significant number of inactive, non-operational, invalid, or unused exploration
permits (EPs) and mineral production sharing agreements (MPSAs) under the
current mineral tenure system. These dormant tenements run counter to the policy
objectives set forth in Republic Act No. 7942, or the Philippine Mining Act of 1995,
and hinder the effective and equitable utilization of mineral resources for the
benefit of national development.

The continued presence of non-performing mineral tenements limits access to

mineral lands by qualified and capable stakeholders, while also weakening
regulatory oversight, environmental safeguards, and the fiscal contributions
expected from responsible mining activities. The lack of clear, enforceable
guidelines governing the extension, renewal, and transfer of mineral agreements
has led to inconsistent practices and heightened risks of administrative challenges.

Recognizing the State’s role as steward of the country’s mineral resources, it is

essential that regulatory authority be exercised with transparency, consistency,
and in accordance with constitutional and legal mandates. Addressing these
challenges will require coordinated legislative oversight, policy improvements, and
strengthened institutional measures to ensure that the mineral tenure system
supports sustainable development, public accountability, and responsible resource
management.

In light of these findings, the Committee respectfully submits its recommendations

for appropriate legislative and executive consideration.

IV. RECOMMENDATIONS

A. EXECUTIVE ACTION NEEDED

In view of the foregoing findings and conclusions, the Committee on

Environment, Natural Resources and Climate Change (as recommended
by the Subcommittee on Proposed Senate Resolution No. 1310),
recommends the Executive through the DENR to consider the following
actions to enhance the governance and performance of the country’s
mineral tenure system:
 1. Conduct a comprehensive internal audit of all active and inactive EPs
and MPSAs to determine compliance with existing laws, regulations,
and contractual obligations;
2. Review and revise the implementing rules and regulations of
Republic Act No. 7942 to address policy and regulatory gaps
identified in this Committee Report, in alignment with the objectives
of Executive Order No. 79, s. 2012, and other relevant policy
instruments; and
3. Initiate inter-agency coordination with the Department of Finance,
Department of Budget and Management, and the Maharlika
Investment Corporation to assess the feasibility of direct State-
supported exploration programs in areas of strategic interest.

B. LEGISLATIVE ACTION NEEDED

To complement executive measures and strengthen the legal foundations

of mineral resource governance, the Committee recommends the
consideration of legislative reforms to Republic Act No. 7942:

1. Codify definitive limits on the validity, renewal, and extension of EPs

and MPSAs to prevent prolonged dormancy and enhance tenure
clarity;
2. Impose appropriate restrictions on the transfer or assignment of EPs,
especially where such transactions are speculative in nature and not
supported by demonstrable exploration activities; and
3. Introduce disqualification provisions and penalties for chronic non-
performance or repeated violations of permit terms and
environmental obligations