In Oceanagold (Philippines), Inc. v. Commissioner of Internal Revenue, G.R. Nos. 251453 and 263004, promulgated on 3 December 2025, the Supreme Court En Banc, through Associate Justice Maria Filomena D. Singh, denied the refund claims of an FTAA contractor for excise taxes paid on its mineral products in 2013 and 2014. Justice Caguioa dissented. The Court held that, under Section 81 of Republic Act No. 7942 (Philippine Mining Act of 1995) and DENR Administrative Order No. 99-56, the contractor need not prove that the taxes caused it a 'detriment' during the recovery period, but the claims still failed: the 2014 payments fell outside the recovery period, and for the 2013 payments the contractor did not meet the conditions of its FTAA.

Background

Oceanagold holds a Financial or Technical Assistance Agreement (FTAA) dated 20 June 1994 covering the Didipio project. In G.R. No. 251453, it sought reconsideration of the Court's 15 February 2022 Resolution, which denied its petition and so upheld the denial of refunds of about PHP 25.8 million and PHP 42.8 million for excise taxes paid from February to June 2013. In G.R. No. 263004, it appealed the Court of Tax Appeals En Banc's denial of a refund of about PHP 136.4 million for June to December 2014.

Key rulings

  • No detriment requirement. Under Section 81 of RA 7942 and DENR Administrative Order No. 99-56, excise taxes paid by an FTAA contractor during the recovery period are recoverable without proof that the payments caused a detriment to the contractor. The Court corrected the CTA on this point.
  • Recovery period begins October 2008. The Court reckoned the recovery period from October 2008, based on the FTAA timetable (three years from the DENR's approval of the Partial Declaration of Mining Feasibility on 11 October 2005) and Oceanagold's own representation, recited in BIR Ruling No. 10-2007 dated 4 May 2007, that commercial production would start in the fourth quarter of 2008. Under Article 1431 of the Civil Code, Oceanagold was held estopped from claiming otherwise. The period ended in October 2013.
  • 2014 payments outside the period. The excise taxes paid from June to December 2014 were paid after the recovery period and are not refundable.
  • 2013 payments: FTAA conditions not met. Although the 2013 payments fell within the period, Oceanagold failed to start commercial production on time, a substantial breach of the FTAA, and did not prove force majeure. Tax refunds are construed strictly against the claimant.

Disposition

The motion for reconsideration in G.R. No. 251453 was denied, and the 15 February 2022 Resolution stands. The petition in G.R. No. 263004 was denied, and the CTA En Banc Decision and Resolution were affirmed.

Practical takeaways

  • FTAA contractors claiming tax recovery need not prove detriment, but must show payment within the recovery period and compliance with FTAA conditions.
  • Representations to the BIR or government about production timelines can bind the contractor later.
  • Document any delay in commercial production and any force majeure event as it happens.

Source: Oceanagold (Philippines), Inc. v. Commissioner of Internal Revenue, G.R. Nos. 251453 and 263004, 3 December 2025 (En Banc).

This alert was prepared by OS Law. This alert is for general information only and is not legal advice. Please consult counsel on how these rules apply to your specific circumstances.