A Japanese business group warns proposed natural resource auction rules in the Philippines could undermine investor confidence and threaten balance sheets.
According to a news report by Philippine Star, the Japanese Chamber of Commerce and Industry of the Philippines (JCCIPI) highlighted section 6.10 of a proposed joint administrative order (JAO), which requires existing contract holders and operators to surrender covered assets to the government once their contracts expire.
Drafted by the Department of Energy (DOE) and the Department of Environment and Natural Resources, the proposed JAO establishes a new framework for awarding mining and other natural resource contracts.
In a position paper submitted to the DOE on 30 October, JCCIPI said:“This raises questions regarding the legal basis for the requirement, its consistency with existing contractual arrangements, and its implications for private asset ownership and investor confidence.”
The organisation stressed that the provision could weaken corporate balance sheets, curb borrowing capacity, restrict future project financing, and erode shareholder value for publicly listed miners.
“The apparent introduction of a different requirement raises concerns about regulatory predictability and the consistent treatment of existing operators,” JCCIPI continued.
“Uncertainty over the ownership and treatment of operational assets at contract expiration can affect corporate valuation, financing arrangements, and decisions on future investments.”
The regulatory impasse has emerged as a key hurdle in the DOE’s 2026 coal bid round, which includes the country’s largest coal mine on Semirara Island in Antique. The tender has stalled after drawing pushback from existing stakeholders, including Consunji-led Semirara Mining and Power (PSE:SCC), delaying the asset’s auction.
Calling for clear and transparent bidding rules that treat qualified participants equally, JCCIPI also noted that while contract renewals should not be automatic, operators should not face disadvantages due to capital already deployed under existing agreements.
“JCCIPI is concerned that unclear requirements could discourage qualified operators from participating in future auctions and affect the decisions of prospective investors considering the Philippine mining industry,” the group wrote.
“As the Philippines seeks to attract foreign investments into strategic industries and emerging supply chains, bidding requirements should be consistent with the government’s investment-attraction objectives and provide clarity to businesses that have already committed capital to the country.”
Write to Paula Fabe at Mining.com.au
Main image: Semirara Mining and Power
