Minahang Bayan: A Philippine innovation in mining regulation

The concept of Minahang Bayan (people’s small-scale mining area) is an innovation in mining regulation that is unique to the Philippines. It refers to designated areas where small-scale miners can operate legally and responsibly, often under government supervision.

Section 5 of the Revised Implementing Rules and Regulations of Republic Act No. 7076 states that “no small-scale mining shall be undertaken outside a Minahang Bayan, and that no entity shall engage in small-scale mining without a small-scale mining contract”.

The vision of the legislators who crafted the law was to localise small-scale mining to bring its benefits directly to the communities where the minerals are extracted. The goal was to have a Minahang Bayan in each local government unit.

The Philippines has 82 provinces, 149 cities and 1,488 municipalities. These are further divided into 17 regions. The total number of cities and municipalities is 1,637. Since the passage of the law in 1991, however, there are only 53 declared Minahang Bayan areas in the country as of July 2025. Specifically, there are 13 in Luzon, three in Visayas, and 27 in Mindanao. The Cordillera Administrative Region has 11, with some already operational.

Small-scale mining is defined as the extraction of minerals using methods that rely heavily on manual labour using simple implements and without the use of explosives or heavy mining equipment. Operations are limited in scale, confined to designated areas, and subject to specific production and equipment thresholds set by law.

Regulatory framework

Small-scale mining is governed by the People’s Small-Scale Mining Act of 1991 (Republic Act No. 7076) and implemented by the Department of Environment and Natural Resources (DENR) Administrative Order No. 2022-03. The DENR administers the sector through the people’s small-scale mining programme, which seeks to balance resource use with environmental protection and community welfare.

Through the Provincial or City Mining Regulatory Board, the DENR designates the zones for Minahang Bayan, issues small-scale mining contracts and monitors compliance.

100% Filipino-owned

Participation in small-scale mining is constitutionally reserved for Filipino citizens. Individuals or co-operatives wholly composed of Filipino citizens are the only entities permitted to directly engage in mineral extraction at this scale.

Applicants for a small-scale mining contract must be registered with the board as licensed small-scale miners. Such a licence is valid for three years and renewable for the same period. Only contractors with a valid licence may be granted a small-scale mining contract, which has a term of two years, renewable for like periods.

Capital investment may not exceed PHP10 million (USD175,282) during the entire term of the mining contract, and the contractor is required to have a minimum paid-up capital of PHP625,000. The area for a mining contract shall not be less than 1.25 hectares and may not be more than 20 hectares.

Need for reform

Gold from small-scale mining must be sold to the Bangko Sentral ng Pilipinas (BSP). A study by the Mines and Geosciences Bureau in 2024 estimated that out of the USD3.9 billion worth of gold produced in 2023 in the country, USD2.7 billion came from small-scale mining. However, only USD27 million, or 1%, was sold legally to the BSP.

In recent years, the government has introduced measures to tackle the leakage of gold from small-scale mining to the black market. In March 2019, the Duterte administration signed Republic Act No. 11256, amending the country’s revenue code to exempt legal small-scale mining operations from income and excise taxes when selling gold to the BSP. The Revenue Regulations No. 4-2020 (Implementing the Provisions of RA No. 11256) was signed on 29 January 2020, and has since encouraged small-scale miners and traders to resume selling their gold to the BSP.

Small-scale mining accounts for an estimated 70% to 80% of the country’s gold reserves. Despite its contribution to the economy, the sector remains largely informal and underregulated.

Enrique V Dela Cruz Jr is a senior partner, Ciselie Marie T Gamo-Sisayan is a partner, and Kristina Mae C Durana is an associate at DivinaLaw in Metro Manila