CEBU CITY, PHILIPPINES — After 16 years of tax disputes, the Provincial Government of Cebu is set to collect ₱211.56 million from Apo Land and Quarry Corporation (ALQC) under a compromise settlement, lower than the original ₱1.218 billion assessment covering liabilities from 2009 to 2025.
In a press briefing at the Capitol yesterday, it was revealed that the proposed settlement, now awaiting authority from the Sangguniang Panlalawigan (SP), seeks to fully and finally resolve all assessed taxes, monitoring fees, environmental enhancement fees, as well as related surcharges, interests and penalties.
The original assessment, issued by the Provincial Treasurer, totaled ₱1,218,630,650.84 and covered Tax on Extraction (Section 124), Monitoring Fees (Section 125), Environmental Enhancement Fees (Section 220), plus accumulated penalties and interests.
Governor Pamela Baricuatro said a significant portion of the ₱1.2 billion stemmed from extraction fees imposed on quarry materials taken from private lands.
“Actually kanang 1.2 billion nga extraction ana, it comes from the private land. APO was extracting in private land. Unya 80% anang 1.2 billion comes from extraction fee,” said Baricuatro.
She explained that nearly 80 percent of the total assessment came from extraction charges computed at 10 percent of the market value of materials extracted.
Backtracking
To recall, former governor Gwendolyn Garcia urged the Department of Environment and Natural Resources (DENR) to revoke the Mineral Production Sharing Agreements (MPSAs) of Apo Land and Quarry Corporation (ALQC) over alleged environmental violations and unpaid local taxes.
ALQC, which operates multiple quarry sites in Naga City and other parts of southern Cebu, was among the firms ordered to halt operations through a series of cease-and-desist orders issued by the Capitol beginning December 2024.
The suspension covered all areas under its MPSAs pending environmental audits and risk assessments.
Garcia cited findings of extraction discrepancies, including a university study that showed ALQC extracted about 3.9 million metric tons of limestone in 2018 — which was higher than the 1.5 million metric tons it reportedly declared during the year of the Naga landslide.
She also argued that some of ALQC’s quarry sites were located dangerously close to residential communities, allegedly violating provisions of the Philippine Mining Act of 1995, which restricts mining activities near populated and ecologically sensitive areas without proper clearances.
Apart from environmental concerns, the Capitol claimed that ALQC owed around ₱1.018 billion in unpaid taxes to the Province from 2009 to 2024 under the Cebu Provincial Revenue Code.
Extraction fee removed
However, under the current administration, Capitol legal counsel, Atty. Restituto Arnaiz, said a long-standing ruling of the Supreme Court bars local government units from collecting extraction taxes on quarry materials sourced from private property.
In the landmark case of Province of Bulacan v. Court of Appeals, the High Court ruled that provinces cannot levy extraction taxes on materials sourced from private property.
ALQC’s quarry operations are located on private lands under Mineral Production Sharing Agreements, making the imposition of extraction tax legally questionable.
This is why, the Capitol prompted the removal of the extraction tax component from the computation.
“Unya kining sa APO cement, private lands man ni ilang gi-extract so mao na dili maka impose og extraction fee which is mao’y dako nga amount nganong naabot nig 1.2 billion,” said Arnaiz
With the extraction fees excluded, the bulk of the ₱1.2 billion assessment was wiped out.
Recomputation
The monitoring fees under Revenue Code Section 125 were retained but recalculated.
During negotiations, ALQC questioned the fair market value previously used by the Province in computing the fees.
Under the compromise, both parties agreed to adopt a fair market value of ₱300 per cubic meter of limestone. With a monitoring rate of 10 percent, this translates to ₱30 per cubic meter.
Arnaiz said the revised valuation significantly reduced the monitoring fee obligations. “Nganong niabot naman lang ni’g 211 million? Dili ni na come up lang dayon nga compromise agreement,” he said.
Another key issue involved how far back the Province could collect monitoring fees. ALQC argued that under Section 194(a) of the Local Government Code, local taxes and fees must be assessed within five years from the time they became due.
The company maintained that assessments covering 2019 and earlier years should already be barred by prescription.
The Province, on the other hand, cited Section 194(b), which allows a longer period of up to 10 years in cases involving fraud or intent to evade taxes. It insisted that older assessments remained collectible under this provision.
Meeting halfway
Rather than await final court determination on the matter, both sides agreed to a compromise.
Monitoring fee assessments from 2009 to 2019 will remain included in the computation. However, an 80 percent discount will be applied to surcharges, penalties and interests for those years.
For 2020 to 2024, no discount on penalties will be granted, while for 2025 only a one-month interest of two percent will be imposed.
Environmental fees retained
The Environmental Enhancement Fee under Section 220 was not declared invalid in court. As such, it remains in effect and was included in the compromise settlement without modification.
Arnaiz noted the environmental and monitoring fees are standard charges under the Cebu Revenue Code of 2008, as amended.
After removing the extraction tax, recomputing monitoring fees, adjusting penalties and retaining environmental fees, the parties agreed on a final compromise amount of ₱211,560,530.35. The amount covers all liabilities from 2009 to 2025.
“Mao nang nigamay nalang na kay ang gi-charge nato nila kay Environmental fee og monitoring fee plus naa’y penalties and surcharges kay dugay man na nabayran kay since 2009 pa man ang computation ani,” Arnaiz shared.
Under the agreement, ALQC must pay the full amount in one lump sum within seven days from signing.
SP authorization required
The proposed compromise is embodied in Proposed Resolution No. 29, Series of 2026. The measure authorizes Baricuatro to enter into and sign the compromise agreement on behalf of the Province.
Arnaiz stressed that the Governor cannot sign the agreement without prior authority from the SP. “Dili man ang office of the governor ang mo-approve ani, dili man ka pirma si governor unless mohatag og authorization ang Sangguniang Panlalawigan, so kani gi-scrutinize pa ni’g maayo sa SP,” he explained.
If authorized and paid, the ₱211.56 million settlement will constitute a full and final settlement of all assessed taxes, fees and related charges arising from the Cebu Revenue Code for the years 2009 to 2025.
| Written by Jonnavie Villa/RAE
