Mining boom possible in PH, says Speaker Belmonte

The Philippines has the potential for a mining boom similar to that seen in China and India, but legislation on taxation should be prioritized to pave the way for investments, Speaker Feliciano R. Belmonte said on Tuesday during the opening of the Mining Philippines 2012 Conference and Exhibition.

To support the mining industry, he said the 15th Congress is studying all issues, including proposed legislation on progressive taxation and the economic provisions of the Constitution that may limit investments.

However, Belmonte said, it is not likely that mining revenue legislation will be passed this year.

“This session is fast going to a close. The taxation issue should be a priority bill. But I don’t believe we have the bill in our hands right now,” Belmonte said.

Belmonte said he would follow up on the proposed bill with Environment Secretary Ramon J.P. Paje, who leads the interagency group (Mining Industry Coordinating Council) that is coming up with concrete programs and proposed legislation based on the general provisions of Executive Order 79 on mining reforms.

Belmonte said that the current Congress effectively stops at the end of February, ahead of local and national midterm elections.

“There is time for the mining industry to submit its own paper and get its act together,” Belmonte said.

During his speech, Belmonte said, “I am confident that the success of both China and India can be replicated in the Philippines if the right strategies are pursued and the necessary accompanying reforms are carried out.”

Both countries have large mining sectors that serve their domestic markets, employ millions of workers and drive economic growth.

“The GDP per capita in India and China grew at impressive annual rates of 3.7 percent and 8.5 percent, respectively, during the 1990s, well above most other mining countries. The rapid growth of mineral production in China can possibly be attributed to a combination of long-term central planning and the dynamic forces created by the market economic approach of each mining enterprise,” Belmonte said. “Meanwhile, India is an example of a country with a large and well-developed state sector in the mining industry.”

EO 79 is part of a series of necessary reforms, Belmonte said.

“We need to resolve revenue-sharing issues as soon as possible,” he said.

From 2008 to 2011, the mining sector contributed roughly 1 percent a year to the domestic economy, Belmonte said, citing government statistics.

In 2011, mining’s contribution to gross domestic production reached P99.2 billion, he said.

Mining-related jobs, meanwhile, increased from 158,000 in 2008 to 210,000 in 2011, Belmonte said.

“The mining industry has also contributed to the revenues of the government. The President himself noted in his third SONA [State of the Nation Address] that in 2010, out of P145 billion total production value derived from mining, P13.4 billion, or 9 percent, went to the national treasury,” Belmonte said.

According to the Mines and Geosciences Bureau, the Philippines has an estimated 14 billion tons of metallic ore deposits and over 69 billion tons of non-metallic ore deposits.

In terms of reserves, the Philippines is third in the world in gold, fourth in copper and fifth in nickel.