‘Mine’ expectations in PH not panning out?

MANILA, Philippines — When the Spanish first landed on the islands of what was to become the Philippines, they were awed by the prevalence of gold ornaments among its inhabitants. Spanish explorers described in their journals the bountiful jewelry they saw, as well as the skill of the natives in intricate metal work.

This is no surprise since the Philippines has been ranked 5th richest in the world when it comes to mineral resources. Situated along the Pacific Rim of Fire, where geological processes result in relatively high deposits of minerals, the archipelago also finds itself ranked 3rd in gold reserves, 4th in copper and 5th in nickel.

However, despite the country’s favorable position, contribution of the mining industry to the economy remains small.

Stunted mining industry

Republic Act 7942 or The Philippine Mining Act, signed March 3, 1995, was supposed to promote mining to foreign investors. Envisioned to help spur economic growth and alleviate rural poverty, critics said such plans have yet to pan out.

The latest statistics released by the Mines and Geosciences Bureau (MGB) revealed that the industry’s contribution to gross domestic product (GDP) is at 0.7 percent as of the third quarter of 2013. For the last five years, its GDP share remained within one percent or below P100 billion. When it comes to exports, mining contribution for 2013 (3rd quarter) is at 7.6 percent or $2.67 billion. Share in total employment is also relatively small at 0.7 percent in 2012 or 250,000 people employed.

“The government was not successful in its mining revitalization program; it did not result in progress,” Clemente Bautista, president of Kalikasan People’s Network for the Environment (Kalikasan-PNE), said during a forum last Thursday on the Philippine mining situation.

Bautista said the country’s mining industry remained extractive, producing mainly raw materials for exports.

But Ronald Recidoro, Chamber of Mines vice president for legal and policy, said it merely means that the industry is smaller.

“It’s neither good nor bad. Sure, one percent means the mining industry is small,” he said. “If government and civil society want a bigger share on mining, they have to accept the fact that they have to encourage investments in the sector.”

Bautista said not much has changed in the last decades as mining in the country remains “export-oriented, dominated by transnational corporations and the local mining elite and dependent on foreign capital and technologies.”

He echoed the sentiments of other speakers during the forum, held in Quezon City. The group hoped the country’s mineral resources would be utilized for national industrialization. They said the metal ores should be processed in the country and be used to create electronics, instead of being shipped to other countries.

On the other hand, Recidoro warned that mineral processing also has negative effects on the environment. He said other countries ship their ores to China for processing because they don’t want the trade-off. At the same time, investors will have to be enticed to set up shop in the Philippines.

“I think we have to realize also that minerals processing is also a business and any investor in minerals processing will look into the viability of putting up a processing facility here in the Philippines,” he said, adding that the country is notorious for high power rates and low rankings in the Ease of Doing Business index.