MANILA, July 28 — An economist said mining companies need to meet the standards of the Philippine government in order not to abrupt their operations as President Rodrigo Duterte pushes to enforce tough mining policies.
“President Duterte announced a tough new minerals processing policy during his State of the Nation Address on 25 July that would require processing of minerals extracted in the Philippines to be done before the minerals could be exported,” IHS Markit chief economist Rajiv Biswas told the Philippine News Agency in an e-mail.
Biswas noted that President Duterte would take stricter approach in enforcing environmental standards for miners.
“Clearly mining operations in the Philippines will need to meet acceptable environmental standards so the Philippines should aim to have best practice international environmental standards in place for its mining industry,” the economist said.
But he mentioned that the tougher mining policies will still depend on the government’s implementation process and transitional arrangements.
Moreover, Biswas said the government could look into the experience of Indonesia, which had drastic ban on mineral ore exports in 2014.
“Indonesia’s experience with the drastic ban on mineral ore exports imposed in 2014 shows that it resulted in considerable disruption to mining operations and also loss of export revenue and fiscal revenue due to the ore export ban,” he said.
“In the end, the Indonesian government agreed a transitional arrangement to allow some mining firms time to build their refineries and smelters. Therefore, the Philippines government may be able to learn from the experience of the Indonesian government and have some consultative process with the mining industry to find a suitable transitional arrangement that allows time for construction of new smelters and refineries in the Philippines,” he added.
Moreover, the country is encouraged to establish a sovereign wealth fund from fiscal revenues and royalties from mining and energy sectors as long-term fund for future generation.
“While the whole issue of mining industry regulation is being overhauled, one important reform that should also be done is to create a Philippines Sovereign Wealth Fund that will invest some of the fiscal revenues and royalties from mining and energy projects to create a long-term fund for future generations from the mining and processing of the nation’s natural resources,” said Biswas.
“Other nations with natural resources assets have been very successful in accumulating capital for future generations in such funds, such as Norway and Abu Dhabi,” he added. (Kris M. Crismundo/PNA)
