Benguet towns end debt feud with Philex

BAGUIO CITY, Philippines— Two towns of Benguet province have settled for a P200-million payment to end a P1.3-billion debt standoff with gold and copper producer Philex Mining Corp., according to a Benguet official.

Itogon Mayor Victorio Palangdan said he had scrapped plans to shut down the mill site of the 58-year-old Padcal mine, Philex’s oldest mine operation, when the firm made the offer to resolve its accumulated business obligations to Itogon town and neighboring Tuba town. The tax debts date back to 2002.

Padcal, the country’s first block cave mine, straddles the two towns.

Itogon had been pursuing these debts from the firm since 2012, but Philex officials expressed some concern about a boundary issue, which might affect how much it would have to pay both towns.

But the municipal councils of Tuba and Itogon agreed to share Philex’s unpaid taxes evenly, or through a 50-50 sharing mechanism.

Palangdan had given the mining company until March 31 to settle its debts or face closure. But on Wednesday, he said: “We do not have to barricade Philex [mine facilities] because the Tuba and Itogon councils, together with Philex, agreed to compromise… Philex agreed to pay P200 million as soon as the memorandum of agreement is signed.”

The amount is 0.2 percent of what the towns had demanded from Philex.

The compromise deal was a result of a series of meetings between the town councils and Philex representatives that began in February, Palangdan said. He said the two towns hoped to finalize the deal by the third week of April.

Lawyer Eduardo Aratas, Philex legal officer in Padcal, said Tuba and Itogon were finalizing the draft agreement, which would spell out the mode of payment.

He said the towns’ officials agreed to allot some of the funds to “tangible projects” while requiring the company to pay the rest of its settlement in cash.  Kimberlie Quitasol, Inquirer N. Luzon