MANILA - Philippine President Ferdinand Marcos Jr signed into law on Thursday a measure overhauling the country's mining tax system to ensure a more equitable share of revenues for the government and greater transparency in the extractive sector.

The new law introduces a simplified and progressive tax structure for large-scale metallic mining operations, replacing a fragmented regime that varied depending on the type of mining agreement.

"We are putting into place a system that is fairer, that is clearer and more responsive to the needs of both our people and the environment," Marcos said during the signing ceremony.

Under the previous system, only mines inside mineral reservations were required to pay royalties, while fiscal obligations varied depending on the type of mining agreement.

The new law, which is expected to generate an average of 6.26-billion pesos ($110.56-million) in additional revenues annually, simplifies and expands taxation across all large-scale metallic mining operations.

Mines outside mineral reservations will now be subject to a margin-based royalty ranging from 1% to 5%, depending on profitability.

A tiered tax of 1% to 10% will apply when income margins exceed 30%, capturing excess profits during commodity booms.

The law also introduces a ring-fencing rule so each mining project will be taxed as a separate entity, preventing companies from offsetting losses from one project against profits from another.

"Gone are the days when a mining contractor can bury its profits beneath the weight of losses. No longer can we use one project's failure to conceal another project's success," Marcos said. "Transparency is now the rule."

The Philippines is among the world's most mineralised countries, with an estimated $1-trillion in untapped reserves of copper, gold, nickel, zinc and silver.

Less than 3% of the country's 9-million hectares (22.2 million acres) identified as having high mineral potential are covered by mining tenements, government data showed.

In 2023, exports of minerals, mineral products, and non-metallic mineral manufactures totalled $7.32-billion, slightly down from $7.53-billion in 2022, according to the Mines and Geosciences Bureau.