MANILA, October 8, 2004 (STAR) BIZLINKS By Rey Gamboa - Instead of just pushing for all those additional tax measures that will surely hasten the demise of the endangered working class species of our society, why not put in some serious work and political leadership to resuscitate our barely breathing mining industry. It is more and more imperative that the government hurdles a recent Supreme Court decision that has sunk the industry deeper into the pits.

New taxes are estimated to generate some P80 billion, yet our natural resources from mining can plow back to government over P150 billion annually for a good number of years. This gives the country some cushion while working on long-term measures to resolve the urgent debt repayment problem that is squeezing every Filipino out of a home and a decent life.

PGMA has already announced that restoring the lost luster of the mining industry is one of her priorities. But there is a big gap between the president’s pronouncement and actual work on the ground to pursue this economic goal. This is now a more complicated economic policy issue because of the court’s interference. What is needed is for someone in government to act as "godfather" and shepherd all involved parties out of current impasse.

After Court Appeal, What Else?

With the specter of a financial crisis, a soaring budget deficit, increasing unemployment, poverty and seething public anger, the government shouldn’t just depend and wait for the SC to reverse its earlier decision nullifying the Philippine Mining Act (PMA) of 1995. Given the SC’s track record, we may see a denial of the appeal again in seven years.

Instead, the government – through the Department of Environment and Natural Resources – should work out other approaches that will attract both domestic and foreign investors with the financial muscle to invest in the exploration, extraction and processing of minerals making use, in the meantime, of the provisions of the Philippine Mining Act that are acceptable and not questionable.

A Roadmap In Limbo T

here are gains to be made by reviving the mining sector. There is a mining roadmap prepared by the Mines and Geosciences Bureau that estimates as much as $6.209 billion in foreign direct investments from new large scale metallic mining and mineral exploration projects in the next six years if the mining industry could be revitalized.

Awaiting action at the DENR-MGB offices are applications for 22 large-scale metallic projects projected to yield $6.147 billion in foreign direct investments and 25 exploration projects worth $62 million.

Additional taxes and fees on new mining projects could bring in an added P3 billion annually to the government’s anemic coffers.

The mining industry has a multiplier effect. The mineral processing industries are important generators for other sectors, and are among the best economy-wide creators of employment and personal income.

An additional 277,380 direct and indirect jobs could be created between 2004 to 2010 if the government goes full blast with the implementation of the mining roadmap.

Backward linkages such as purchase of goods and services, forward linkages such as use of mineral products and social multipliers such as development of human resources, schools, colleges, clinics – each additional 100 people employed by the mining industry translates into roughly 500 new jobs created elsewhere in the country.

Some of the mining projects that are just waiting to be tapped so they can bring in new revenue streams for the country are the Nonoc nickel project by Nonoc Processing Corp./Philnico in Nonoc Island, Surigao del Norte with potential investment of $1 billion, projected to begin commercial operations by 2009; the Pujada nickel project in Davao Oriental by Asiaticus, $1 billion, 2009; and the Mindoro nickel project of Aglubang Mining Corp. in Mindoro Oriental, $1 billion, 2009.

But all of these will not be realized if our government will just sit on this well-crafted and progressive mining roadmap, and admire just how perfect it could have been. Needless to say, crying over spilt milk does not solve anything and we have to move on.

In Search Of A Godfather

Republic Act 7942 or Philippine Mining Act 1995 was actually considered as one of the most progressive mining legislations in the Asia-Pacific region. When the SC’s landmark decision declared it as unconstitutional, the blow somehow stunned everyone. But it is now time to shake the blues and start working.

As I stated earlier, the industry needs a "godfather" who will lead the government’s effort to quash a doubting public’s fears about the environmental impact of mining. And who will convince all concerned, including the magistrates of the court, that the built-in provisions in Republic Act 7942 for the protection of the indigenous peoples will really work.

The environmental and social responsibility provisions embodied in the Act are even better compared to existing mining laws of other developed countries. The Act emphasizes sustained development and ensures that resident or host communities are involved and receive a fair share in the benefits from mineral development.

For instance, the mining roadmap states that investors are required to set aside P44 million annually to fund the Social Development Management Program of large-scale mines that will prioritize education for host communities. Also, royalties to indigenous people will contribute $23 million to the trust fund.

These are desperate times. Rather than force on people’s throats unrealistic measures such as more taxes, the country’s economic managers should begin looking at other more feasible options. Reviving the local mining industry is definitely one of them. The question is, who will take up the challenge.

‘Breaking Barriers’ With Winston Garcia, GSIS President And GM

‘Breaking Barriers’ on IBC-TV13 (11 p.m. every Wednesday) will feature Winston Garcia, GSIS president and general manager, on Wednesday, 13th October 2004.

Nowadays, accusing guilt on someone comes easy. Through a consensual media, a person or an organization may be labeled in the public’s mind as guilty, corrupt, or subversive with neither due process nor sufficiency of evidence. To defend oneself, one has to counter; to remain quiet is to accept guilt. The mudslinging will simply go on.

What are the issues against the GSIS president and general manager? What is the root cause of the ongoing furor about alleged corruption and abuse of authority? What is the real status of the GSIS fund? Watch it.

Tourism Issues

On TV ‘Isyung Kalakalan at Iba Pa’ on IBC-TV 13 News (5 p.m., Monday to Friday) ends today with a discussion of the government’s tourism program. There are early indicators that the tourism industry is on a rebound after taking a beating from recent high-profile incidents of kidnapping, terrorism and an unreliable peace and order situation. However, with its inadequate infrastructure and poorly trained tourism industry workers, the country is still barely ready to move to the major leagues of the tourism market. How will our tourism industry move forward? Watch it.

Should you wish to share any insights, write me at Link Edge, 4th Floor, 156 Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at If you wish to view the previous columns, you may visit my website at

Reported by: Sol Jose Vanzi

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