FOR real development to take place, the Chamber of Mines is asking the Aquino administration to take into consideration minerals development, as the sector can contribute immensely to poverty reduction and inclusive growth.
The Chamber of Mines lauded President Benigno Aquino 3rd’s recent pronouncement of a “geographic approach” to poverty reduction by classifying the 30 poorest provinces into three categories to prioritize economic opportunities, enhance mobility of labor and goods, and increase disaster resilience in each.
But the group also urged the government not to forget minerals development in its plans, arguing that the mining sector is a vital component for driving the Philippine economy forward.
It cited an Asian Development Bank report in 2012, titled “Taking the Right Road to Inclusive Growth,” in which the bank highlighted the need for the Philippines to develop a stronger industrial base so that the economy can “walk on two legs”—industry and services—to create job opportunities for the growing working-age population.
Minerals development, if properly done, can add 1 percent to 2 percent to gross domestic product (GDP) growth over and above current levels, said Finance Secretary Cesar Purisima at a recent IISS Fullerton Lecture in Singapore, the chamber noted.
At the same venue, Purisima said that, “Hopefully, mining activities can help contribute an additional percentage to the Philippines’ ability to walk on two legs.”
The country’s nearly $3-trillion worth of mineral potential for copper, gold, nickel and iron puts the Philippines alongside other mineralized countries in the world.
The chamber noted that of the 30 poorest provinces, at least 10 have significant mineral potential which have remained largely unexplored and untapped.
If properly harnessed, the economic growth the poorest provinces will experience from tapping their mineral resources would be transforming, the chamber said. Left alone, the minerals contribute nothing to economic growth and in most instances, only make farming and agriculture more difficult, as the presence of minerals like nickel and iron deplete the soil of nutrients.
The chamber said that large-scale mining will add jobs in the mine sites, the host and adjacent communities and the country, and add healthcare, hospitals, schools and social development to local and surrounding communities.
Mines thrive in the hinterlands where the most devastating incidences of poverty occur, and where the need for inclusive growth is greatest, the chamber said.
Department of Labor and Employment data showed that 250,000 workers were directly employed by the industry in 2012, and the resulting collateral businesses and commerce in host communities could increase employment by at least that much again.
Large mining companies hire unskilled workers and give them technical training in welding, drilling, heavy equipment operation and mechanics, which they can also use to improve their lives.
Moreover, the industry pumps billions of pesos into the local economy—buying goods and services and raising the community’s standard of living.
A good example is Siocon in Zamboanga del Norte where mining companies helped elevate the locality from Class 4 to Class 1 municipality. But the community is now upset because the government did not allow the extension of mining projects in the area.
By 2018, a flourishing mining industry is projected to provide at least 410,000 jobs. This would result in some 2 million Filipinos becoming direct beneficiaries of the mining industry, based on the assumption that each worker belongs to a family of five.
If promoted and allowed to operate at optimal capacity, the mining industry could account for about 7 percent of the country’s GDP, a big jump from its current 1.7-percent share, the chamber said.
As of the third quarter of 2013, mining accounted for 7.6 percent of infrastructure spending where there were none before, pouring in 1.5 percent of its operating budget for social development that translates to billions of pesos in health, hospitals, education, livelihood, training and enterprise development.
The industry also spends billions of pesos on roads, bridges, power supply and other infrastructure in remote, poverty-stricken areas. The industry builds infrastructure where the provinces can’t, or don’t, adding to the indirect “tax” benefit paid to local communities.
As to their impact on the environment, large-scale mining firms manage their environmental impacts through strict implementation of their Environmental Protection and Enhancement Programs, oftentimes leaving a mined-out area in a better environmental condition than before they came in, the Chamber of Mines said.