CHAPTER 4 coal, petroleum and other mineral oils, all forces but also to “all natural wealth that
forces but also to “all natural wealth that may be found
PHILIPPINE MINING ACT OF 1995
(RA 7942)
GOVERNING LAW
On March 3 1995, RA 7942 was enacted instituting a
new system of mineral resources exploration,
development, utilization andconservation in the
country.
DECLARATION OF POLICY
The state shall ensure, for the benefit of the
Filipino people, the full exploration and
development as well as the judicious
disposition, utilization, management, renewal
and conservation of the country’s forest, miner,
land, waters, fisheries, wildlife, off-shore areas
and other natural resources.
All mineral resources in public and private
lands within the territory and exclusive
economic zone of the Republic of the
Philippines are owned by the State to promote
their rational exploration, development,
utilization and conservation through the
combined efforts of government and the private
sector in order to enhance national growth in a
way that effectively safeguards the environment
and protect the rights of affected communities.
Mineral production is a major support of the
national economy and therefore the intensified
discovery, exploration, development and wise
utilization of the country’s mineral resources are
urgently needed for national development.
OWNERSHIP OF MINERAL RESOURCES
Section 2 Article 12 of the Constitution: “All
lands of the public domain, waters, minerals,
of potential energy, fisheries, forests or timber,
wildlife, flora and fauna and other natural
resources are owned by the state. With the
exception of agricultural lands, all other natural
resources shall not be alienated. The
exploration, development and utilization of
natural resources shall be under the full control
and supervision of the state. The state may
directly undertake such activities or it may enter
into co-production, joint venture or production-
sharing agreements with filipino citizens or
corporations or associations at least sixty per
centum of whose capital is owned by such
citizens.” The foregoing provision echoes the
concept of jura regalia pursuant to which all
lands of the public domain belong to the state
and that the state is the source of any
asserted right to ownership in land and
charged with the conservation of such
patrimony. All lands not appearing to be
clearly of private dominion presumptively
belong to the state. Thus, if a person is the
owner of agricultural land in which minerals are
discovered, his ownership of such land does not
give him the right to extract or utilize said
minerals without the permission of the state to
which such minerals belong. Once minerals are
discovered in the land, whatever the use to
which it is being devoted at the time, such use
may be discontinued by the state to enable it to
extract the minerals therein in the exercise of its
sovereign prerogative. The land is thus
converted to mineral land and may not be
used by any private party including the
registered owner thereof for any other
purpose that will impede the mining
operations to be undertaken therein. The
regalian doctrine then extends not only to land
in the bowels of the earth.”
The right to possess or own the surface
ground is separate and distinct from the
mineral rights over the same land. And the
fact that the location of a mining claim has
been perfected does not bar the
government’s exercise of its power of
eminent domain. The right of eminent
domain covers all forms of private property,
tangible or intangible and includes rights
which are attached to land.
Ownership of mineral deposits by the state is
also a dominant principle expressed in the
Mineral Resources Decree of 1974 (PD 463)
● SECTION 4:MINERALS EXCLUDED FROM
OTHER RIGHTS TO LANDS: the ownership or the right
to use public or private lands whether exposed or submerged, for
agricultural, logging, industrial, commercial, residential, petroleum
exploration and/or exploitation or purposes or any other than
mining does not include the ownership of, nor the right to develop,
exploit or utilize, the mineral deposists found in, on or under the
surface of such lands, except with respect to quarry resources as
provided for this Decree.
● SECTION 5 MINERAL DEPOSITS OPEN TO LOCATION
AND LEASE: Subject to any existing rights or reservations, all
valuable mineral deposits in public land including timber or forest
land as defined in the Forestry Reform Code (PD 389) or in private
land not closed to mining location, and the land which they are
found shall be free and open to prospecting, occupation, location
and lease.
Section 5 of RA 7942 on mineral reservations
provides that “mining operations existing in
mineral reservations and such other
reservations as may thereafter be
established shall be undertaken by the
department or through a contractor.”
said provision grants the President the power to
proclaim a mineral land as a mineral
 reservation regardless of whether such land
is also an existing forest reservation.
The constitutional policy of the state’s full
control and supervision over natural resources
proceeds from the concept of jura regalia, as well
as the recognition of the importance of country’s
natural resources not only for economic
development but also for its security and national
defense. Under this provision, the state assumes a
more dynamic role in the exploration,
development and utilization of natural resources.
The nationalization of the natural resources
which characterizes the 1935, 1973 and the
present constitution is intended to
(1) insure their conservation for filipino posterity,
(2) serve as an instrument of national defense,
helping prevent the extention to the country of
foreign control through peaceful economic
penetration and
(3) to avoid making the philippines as a source of
international conflicts with the consequent danger
to its internal security and independence.
i. Full control and supervision by the
state in the exploration, development
and utilization of the country’s natural
resources
The adoption of the concept of jura regalia
that all natural resources are owned by the
state as well as the recognition of the
importance of the country’s natural resources
not only for national economic development
but also for its security and national defense,
ushered in the adoption of the constitutional
policy of full control and supervision by the
state in the exploration, development and
utilization of the country’s natural resources.
The options open to the state are through
direct undertaking or by entering into co-
production, joint venture or production
sharing agreements or by entering into
agreement with foreign-owned
corporations for large-scale exploration,
development and utilization.
ii. The old system of exploration,
development and utilization of natural
resources through licenses, concessions
or leases has been omitted under the
1987 constitution
With the shift of constitutional policy toward
full control and supervision of the state over
natural resources, the court in Miners
Association of the Phils. v. Factoran
declared the provisions of PD 463 as
contrary to or violative of the express
mandate of the 1987 Constitution. The
said provisions dealt with the lease of
mining claims; quarry permits or licenses
covering privately-owned or public lands
and other related provisions on lease,
licenses and permits.
Section 2 of Article 12 of the 1987
Constitution does not apply retroactively to a
“license, concession or lease” granted by the
government under the 1973 Constitutionn or
before the effectivity of the 1987
Constitution on February 2, 1987. As noted
in Miners Assoc. Of the Philippines, the
deliberations of the Constitutional
Commission emphasized the intent to
apply the said constitutional provision
prospectively.