"After reading your column in today’s business page of The Philippine Star, what came to my mind is the popular song "Otso Otso." You have indeed clearly recognized that na otso-otso ang ating Mining Act 7942.
"Let me explain the background of the law as an insider in the Mines and Geosciences Bureau at the time of the crafting and approval of the law. After the 1987 constitution, I happened to be invited to join the Cory government to assist in the crafting of the mining law.
"The first attempt started in 1988. But then Senate president Neptali Gonzales failed to have it approved. The proposed mining law was termed Mining Code. The succeeding year upon advice (the), terminology (was changed) into Mining Law instead, and the final approval took place in 1995, or eight years after.
"Right after its approval, on the same year, the financial and technical assistance agreement (FTAA) provision was questioned together with other issues, and it took another eight years (1996-2003) to declare some provisions (as) unconstitutional.
"I agree with your analysis on the possible impact of the Supreme Court’s decision but let me add a few observations, which might be of help in the motion for consideration.
"First, during the deliberation of both houses, the issue on allowing greater participation of foreign investors was anchored on the minutes of the Constitutional Convention wherein Commissioner (Bernardo) Villegas was then the chairman of the National Economic and Patrimony (committee).
"We were not satisfied with the interpretation of the committee’s intention as lifted from the minutes alone, so we decided to write a formal letter to Chairman Villegas confirming the minutes‚ interpretation, and we got an affirmative answer. Thus it was adapted in the 1995 Mining Act.
"Secondly, the approval of the two FTAAs (Western Mining Corp. and Climax-Arimco) happened at the time of President Ramos, and if I am not mistaken, Justices (Renato) Corona and (Antonio) Carpio were then the legal staff that evaluated the said contract.
"Does it leave a bad taste (in the mouth) to think that it had to wait for the two personalities in order to decide (its) unconstitutionality after eight years? Was this a coincidence or a twist of faith? I would be more comfortable if the numbers were 12-0 rather than 7-5, as if it needed the two justices to declare it unconstitutional.
"Lastly, in case you are not aware, the mining law in the Philippines was considered a model by most countries in the Asian region being the first to be crafted during that decade that attracted almost all major mining companies in the world.
"May I correct your perception that a tunnel starts from a portal towards an open exit, that’s why there is hope, but to me our industry has now has a character of an adit (a tunnel that has not reached an exit but ends in a wall) after the Supreme Court rendered judgment on the Mining Act 7942.
"Thank you for taking the cudgels of favoring our sector, which indeed is much needed at this time when our balance of trade is affected. Our only hope is to bring back the luster of the mining industry with over a million workers and generates almost 25 percent of our total export earnings!"
"In your column today you showed concern over our deteriorating exports. And how true. To understand the factors behind this you have to go back 10 years ago when Ramos’ term begun.
"He adopted "golf course economics" and achieved to psyche a vast number of Pinoys that we had become a tiger economy. Remember? He and his bright boys prostituted the Philippines by cheap wholesale of investment portfolios and land in the form of golf courses, condominiums and what not.
"During his time it was to hell with agriculture, to hell with small and medium scale enterprises, and to hell with exports.
"Dollars flowed in like crazy, our exchange rate strengthened artificially, etc. The rest is history. The crash came a few years later, and it fell on us heavily.
"Electronics? Come on. For every $1 of electronics exported, only about $0.10 stays in our coffers. The rest goes to the parts and components that are imported. Yes, that industry gives jobs but those jobs can be done elsewhere at cheaper labor rates. We will eventually lose that too, perhaps to China or Vietnam or Laos or wherever. Then what?
"The garment industry will face severe problems this year because global quotas will be removed. Buyers will be able to buy their products anywhere they please where they’re cheaper, and that’s not us.
"Who’s paying attention to the real net dollar earners such as exports of agricultural products, minerals, processed foods, furniture-giftware-decorative accessories, and others?"
The SEC has recently been involved in several high profile issues. The investing public is not happy and is asking several questions that, in their view, SEC has to adequately respond.
Why were several pre-need companies been able to solicit millions of pesos from subscribers before SEC ultimately canceled their licenses? Why was SEC not able to stop the operations of several multi-level marketing companies involved in pyramiding schemes that victimized thousands of small investors?
Why is it that despite announcements of investigations into incidences of stock manipulation and insider trading, no one has been indicted or jailed? Whatever happened to the Dante Tan case that the government reportedly lost?
Join us break barriers and gain insights into the views of chairman Lilia R. Bautista on various issues affecting the SEC and Philippine business in general. 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 reygamboa@linkedge.biz. If you wish to view the previous columns, you may visit my website at http://bizlinks.linkedge.biz.