97% of mineral production in the Philippines goes to foreign industries
As the Philippine Chamber of Mines concludes its international mining conference today, research group IBON reiterates that industries of other countries reap more benefits from large-scale mining in the Philippines than the local economy.
The three-day international mining conference, held in Solaire Resort Hotel and Casino in Manila, focuses on the supposed role of Philippine mining in the country’s development and in the global economy.
According to IBON, 97% of mineral production in the Philippines goes to foreign industries, proving the export-oriented nature of Philippine mining. It supports other countries’ industrialization and profit instead of being instrumental in the development of local industries.
In fact, the biggest mining companies in the Philippines come from the United States, Australia, Canada, Norway, Switzerland and China. While mining is unarguably vital to an economy, its mining activity has unfortunately been vital to other economies instead of its own.
To illustrate, as second-biggest automobile producer in the world, the US usually uses 40-60% mineral components; computer chips and other electronic products use 60% in minerals. For every dollar in the final output, mining contributes 45 cents to electrical equipment and 42 cents to machinery. All industries utilizing minerals contribute around U$2.5 trillion to US GDP.
The group reiterated that the mining industry has remained a weak economic contributor after 20 years of mining liberalization under the 1995 Mining Act. Foreign investments in mining fell from US$1.45 billion in 2013 to US$693.1 million in 2014. The share of mining in the gross domestic product is only 0.7%, while its contribution to employment is only at 0.6%. Government shares from mining in taxes, royalties and fees amounted to Php22.83 billion in 2013 or a measly 1.33% of total tax revenues.
IBON said that the country’s agriculture, industry and service sectors can benefit from mineral products in construction, power, electronics, machinery and transport. But for this to happen, government must reverse its current pro-foreign mining policy. Minerals are non-renewable resources, but government’s further institutionalization of a liberalization thrust in the mining sector is tantamount to giving up the country’s chances for industrialization. (end)