Government seeks reversal of mines ruling

The government has asked the Supreme Court to reverse a decision to severely curtail foreign investments in the local mining sector.

The court filing cited potential losses of more than $10 billion to the country after the Supreme Court last month struck down a law that allowed foreign companies to own 100 percent of mining operations.

The Philippines would lose $9.5 billion in mining revenues, $461 million in potential investments and $1 billion in taxes from mining companies along with nearly 7,500 jobs as a result of the Supreme Court decision, the filing said.

"The court’s decision has frightened incoming investors. It has practically dragged down the competitiveness of the Philippines in terms of attracting foreign investments," the motion said.

The Supreme Court had ruled that government changes to regulations violated a constitutional provision barring foreigners from the mining sector.

For its part, the government argues that the rules do not grant foreign investors any ownership of mineral resources as Filipinos receive 60 percent of all the benefits.

In a related development, the Board of Investments (BOI) will review the 2005 Investments Priorities Plan (IPP) to make sure that the local mining industry continues to be a priority investment sector given adequate incentives.

This was disclosed yesterday by Trade and Industry Secretary Cesar V. Purisima who reiterated his commitment to support, promote and revitalize the mining industy.

However, following the recent Supreme Court (SC) decision declaring as unconstitutional the Financial and Technical Assistance Agreements (FTAAs) the would allow foreign mining firms by up to 100 percent control of local mining operations, the BOI is trying to find other ways to attract investors to the mining sector.

"Mining has always been a priority-preferred area of investment as this activity is always in the BOU’s IPP," Purisima said.

The BOI, would review the 2004 IPP and look at the amount of incentives we can provide the mining industry without violating any of the provisions of the Constitution, in view of attracting more investments in the sector," he added.

Furthermore, Purisima said, the BOI would create mining assistance centers in provinces with rich mineral deposits that would facilitate investment inquiries and activities.

The BOI, Purisima assured, would work closely with the Department of Environment and Natural Resources (DENR) in holding monthly meetings with stakeholders to hear and address issues and concerns of the industry.

Purisima stressed that mining is considered an important component of the Philippine economy.

IN the 1980s, he pointed out, the Philippines was ranked the fifth biggest producer of gold and the ninth biggest producer of copper in the world.

Mining, Purisima cited, contributed more than two percent of the country’s gross domestic product and 21.3 percent to the country’s total export.

The sector also contributed P519 million to total exports in 2002 and accounted for P356.3 million in paid-up investment.

Likewise, the industry paid P2.21 billion in taxes and fees as will as P5 billion in wages and benefits in 2002.