Why not mining?

There’s one way for government to make some money, lots of money as it tries to recover from the economic and financial collapse caused by COVID-19. The Department of Finance estimates COVID-19 will result in an outlay of some P600 billion, plunging the country into debt from both internal and external financing of about P300 billion. It will have to repay that. Health services need massive funding, and the “Build, build, build” program is at risk as funds dry up. And that number could get worse if business is not soon back on its feet. Even then, any source of money should be welcome.

There is a white knight: mining. Surigao del Norte Rep. Robert Ace Barbers recently raised the possibility of reviving mining. Till now, though, the President has opposed it, correctly recognizing that it’s done great harm to the environment. It has, but—and this is what has not been recognized—it’s the irresponsible, informal, often illegal, mining that’s done it. The big guys, except for one or two who can be brought to heel, act responsibly and look after the environment, putting the area back into environmentally acceptable condition at the end of the mine’s life. Mines don’t last forever, and current laws, rules, and regulations mandate rehabilitation, something that was not the case in the past under previous laws. During operations, proper care is prescribed, too. The rules have to be followed. The big guys have their reputation and survival at stake if they don’t.

It’s irresponsible mining that must be stopped. Mining is not an industry that allows for exploitation done by hand.

Mines, the large-scale ones, bring wealth to rural communities where it is most needed, develop those communities, and employ lots of people. Mines pay considerable taxes and boost our international reserves through exports. With the loss of tourists and OFW income in decline, we need all the dollars we can get.

A responsible miner builds rural roads. Yes, the company uses them, but so does the community. They are local roads they never had. A responsible miner provides scholarships for deserving students, often builds a school, establishes a clinic for all, and provides jobs for people who had none. According to the Mines and Geosciences Bureau (MGB), the mining firms’ social development and management programs currently benefit more than 800 barangays (villages). This is something we need during the pandemic, especially with the government needing to allocate funds to other poverty alleviation and public health services programs.

What’s more, it creates jobs. In 2015, an estimated 236,000 Filipinos were working in mines. This had dropped to 184,000 by 2019. I’m sure the 7.3 million Filipinos unemployed as of April 2020 (a record high currently), including the estimated 4.9 million Filipinos laid off by COVID-19, would welcome getting a decent income again. And the major mining companies do pay well, as pointed out by MGB. While estimates vary, it is conservatively estimated that for every job in the industry, about four indirect jobs may be generated in the upstream and downstream sectors. As in tourism, there’s a substantial multiplier effect. These jobs include the mining’s forest and environmental protection and rehabilitation activities that large mining firms undertake.

In 2016, these companies paid P22.6 billion in taxes, fees, and royalties. In 2017, the excise tax was doubled to 4 percent of gross sales, so in 2018 the total government take increased to P31.3 billion. This can go up much more if policy restrictions are removed. Just three pending projects, if approved, can increase total government take by P13 billion per year and add P1.3 billion annually in social expenditures. That’s money not to be sneezed at for an economy that’s going to desperately need more funds to finance its anti-COVID-19 measures and social protection programs.

As a result of slower annual growth, the sector’s contribution to GDP has slid from nearly 0.8 percent in 2016 to 0.5 percent in 2019. Its share would’ve grown steadily had mining been supported.

Only about 3 percent of Philippine land would be mined if ALL potential mines were exploited. And it would never be ALL. All of this is conditioned on mining being responsibly done. This is the key and is critical, and recent rules enforce this.

Mining is one way to give Filipinos jobs and make some money for the government.

Email: wallace_likeitis@wbf.ph