MANILA, Philippines—The Philippines lost an estimated P10.4 billion worth of foreign direct investments in the mining sector last year due to uncertainties over the government’s policy direction on the mining sector as well as the delayed issuance of mining permits, according to the Chamber of Mines of the Philippines, or COMP.
COMP said in a statement that while the government works on an executive order on mining (which was originally set to be released in February 2012), the Department of Environment and Natural Resources (DENR) remains closed to new mining applications.
As such, foreign investors opted to place their capital elsewhere instead of parking their money in the banks, COMP said.
Data from the Bangko Sentral ng Pilipinas indicate a mining FDI outflow of $240.43 million, or P10.4 billion, in 2011, a reversal from the $282.08, or P12.2 billion, inflow the previous year.
Mining companies have largely adopted a wait-and-see attitude as the mining policy will affect their future operations, COMP said.
“Much remains to be seen but investor confidence in the mining industry would hinge largely on the much-awaited mining policy that will be set by the present administration,” COMP said.
COMP projected that from 2011 to 2016, increased production from several gold, nickel and copper projects can bring about an increase of up to 4 to 5 percent in the gross value added (GVA) of the mining sector.
GVA indicates the contribution of a certain sector, such as mining, to the domestic economy, according to the National Statistical Coordination Board.
The mining industry group noted that with P5.2 billion capital investments in 2011 increasing to P17 billion in 2016, a 5 or 6 percent in GVA from the mining sector can be expected in 2016.
Originally posted at 03:42 pm | Monday, April 16, 2012