The Philippine Mining Act of 1995: Is th

law sufficient in achieving the goals of

output growth, attracting foreign
investment, environmental protection
and preserving sovereignty?
Dr. Roberto B. Raymundo
School of Economics
De La Salle University, Manila
INTRODUCTION

 The Philippines has an estimated $840 billion worth of untapped mineral

wealth which includes copper, gold, nickel, chromite, limestone, clays, etc.
 The gross production value for mining was $3.466 billion in 2012, but
investment in the mining sector by 31% during the same year.
 Mining has destructive impact on environment through deforestation and the
loss of vegetation and biodiversity.
The Philippine Mining Act of 1995 and
Executive Order 79
 The Philippine Mining Act governs the exploration, development, processing
and utilization of mineral resources in the Philippines.
 It allows 100 percent foreign ownership of mining projects through Financial
or Technical Assistance Agreements (FTAAs) and provides several incentives
such as income tax holiday, free capital equipment imports, etc.
Actual results of mining operations

 Production value in mining had increased from P33.1 billion in 1997 to P146.4
billion in 2012.
 The contribution of mining output to Gross Domestic Product remains very low
from 0.8% in 1998 to its highest level of 1% for the years 2010 and 2011 (the
highest recorded).
 The mining sector’s contribution to total employment is less than 1%.
The Boac River Disaster in March 1996
Marcopper Mines
The Albay Cyanide Spills in October 2005
Lafayette Mining Corporation/Rapu Rapu mines
The 2012 Balog and Agno River Disaster
Philex Pacdal Mines
Discouraging investments

 The completion of a mining agreement between the national government

(through DENRY) and a private mining firm and the consequent issuance of a
mining permit may be challenged at the local government level. The LGU can
pass an ordinance to ban open pit mining.
 Mining permits may also be challenged by indigenous peoples organizations
protecting ancestral domain and scared burial sites. They can also be
challenged by fishery groups whose livelihood will be put
Other problems on the implementation
of the law
 The severe lack of government personnel with the appropriate technical
expertise, and a grossly inadequate budget for monitoring mining operations;
 Many local governments do not have the capability to estimate the projected
benefits of mining, and even the DENR has relatively few experts on natural
resource valuation.
 Bureaucratic red tapes in the approval of permits by local and national
government is slowing the rehabilitation of affected areas.