Neda backs more policy reforms in mining

A mining field operated by OceanaGold, an Australian mining company, in Nueva Vizcaya. —RICHARD BALONGLONG

Despite the controversies surrounding the industry, mining has a role to play in helping the Philippine economy grow further as well as generate jobs for more Filipinos if policies to ensure the responsible operations were in place, the National Economic and Development Authority (Neda) said.

According to Economic Planning Secretary Ernesto Pernia, the Philippines—despite its relatively small land area—“is one of the world’s most well-endowed countries in terms of mineral resources.”

According to the Mines and Geosciences Bureau, about 30 percent or 9 million hectares of the country’s total land area have a high mineral potential. In addition, from 2011 to 2015, the mining sector has been able to generate an average of 236,400 jobs annually.

Despite this, the mining sector’s contribution in terms of gross value-added still remained relatively low at an average of 0.7 percent of the country’s gross domestic product (GDP) and 5.6 percent of the total exports.

“Considering its small contribution to the economy and the contentious debate on mining and its links with issues on land-use, environment and social acceptability, the question for us is: How can we harness the full potential of the country’s mineral resources to contribute to economic economic growth, generate employment and reduce poverty?” Pernia said.

Speaking before mining industry stakeholders earlier this week, the Neda chief praised the efforts of the Department of Environment and Natural Resources to push for responsible mining in the country through its ongoing mining audits.

Plagued by issues

Pernia pointed out that the mining sector has been plagued by issues and challenges for decades, including the proliferation of illegal small-scale mining activities that adopt destructive mining practices and standards, the limited number of processing plants to create added value to mineral products and the lack of an efficient revenue collection and distribution that ensure the equitable and timely distribution of the mining income to legitimate beneficiaries.

“We in Neda believe that it is necessary to implement further policy reforms to enable the mining sector realize its full potential and increase its role in nation building,” he said. “However, developing sound and effective policies entail the use of quality data that are not usually easy to obtain, especially in the environmental sector.”

To this end, Pernia endorsed the Philippines Wealth Accounting and Valuation of Ecosystem Services (Phil-Waves), which began its implementation in late 2013. Its main outputs are the estimation of macroeconomic indicators and the development of national accounts and ecosystem accounts, which aim to assist in evidence-based decision making.

He also cited the Philippine Statistical Authority (PSA) for the launch of the physical and monetary asset accounts for the four metallic minerals— gold, copper, nickel and chromite.

“These accounts are not merely a set of numbers, but are relevant inputs in the assessment and development of policies for the mining sector,” the Neda chief said.

“One critical use of the mineral accounts is in the analysis for an appropriate fiscal regime. However, the bill on fiscal regime and revenue-sharing arrangement was not enacted in the 16th Congress. Thus, this is a great opportunity to revisit and put forward new calculations for an appropriate tax rate that will be levied on mining companies using the resource rents estimated from the mineral accounts.”

“Altogether, if properly utilized, these will be useful in formulating policy recommendations on how to operationalize responsible mining in the country,” Pernia said.