Australian mining firm eyes new project in Nueva Vizcaya

BAYOMBONG, Nueva Vizcaya, Philippines — An Australian mining firm is planning to expand its exploration activities in another remote village in this mineral-rich province.

Royalco Philippines, Inc., an Australian-owned mining firm, through its local subsidiary Buena Suerte Mining is now conducting community consultations for the possibility of conducting exploration activities in Barangay Yabbi, Dupax del Norte town here covering at least 3,000 hectares.

The possibility of exploring gold and copper in Yabbi came about as the firm was still at a standstill in the Pao-Kakiduguen area in neighboring Kasibu town after a group of Church-backed anti-mining residents denied entry of their exploration equipment last year despite having an exploration permit from the government.

“We are offering people in the area of Yabbi and environs development projects, including maintenance and repair of roads, as part of our social measure projects and as a show of our sincerity to develop the area with the affected residents,” said Gemma Talapi of Royalco’s community development affairs office.

Some village officials in the area, including those to be affected in case the exploration project pushes through have also expressed support for the said exploration activities in Yabbi, saying this will help in the development of their community as the firm has been able to provide them with simple infrastructure projects.

“Various projects have been made by the firm in upland barangays in Dupax del Norte town,” said Belance village head Tino Sanchez, the municipal federation chairman of the Liga ng mga Barangay.

Joey Ayson, Royalco’s country manager, said more development projects will be provided to the residents of Yabbi, Binwangan, Macabenga, Belance, Oyao and Bitnong once their exploration permit is approved by the government’s Mines and Geosciences Bureau.

The said 3,000-hectare initial exploration area is part of Royalco’s 16,000-hectare exploration site covering parts of Muta, Kasibu and Nagtipunan town in Quirino province.

The Yabbi proposed site came as exploration activities by another mining firm, the British-owned FCF Minerals Inc. (also known as MTL Corp. or Metals Exploration) continued in Runruno, Quezon town with commercial operations foreseen to start next year.

Another firm, the Aussie-Kiwi giant OceanaGold, was on the verge of commercial operations when the global financial crisis had forced it to temporarily halt its multibillion-peso Didipio Gold-Copper project in Didipio, Kasibu.

At the time of the stoppage, the firm was also facing a legal battle with the provincial government here over unpaid local taxes.

Inflation seen dropping to 1.2% in June

By Des Ferriols

MANILA, Philippines – Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said inflation rate is expected to drop to as low as 1.2 percent in June, mainly due to the decline in electricity rates and the slowdown in food prices.

Tetangco told reporters that the national average inflation rate is projected to drop to 1.2 percent to 2.1 percent in June, reflecting expectations of the Bangko Sentral ng Pilipinas (BSP) for continued milder price increases.

“It’s consistent with our forecast for full-year 2009 and 2010 inflation rates that would both be within their corresponding target ranges,” Tetangco said.

According to Tetangco, the continued decline in the inflation rate in June could have been due to lower electricity rates during the month and slower price increases in certain food items and in domestic pump prices.

“The BSP will continue to monitor price developments, both domestically and in international markets, to ensure that our policy stance remains appropriate and responsive,” he said.

Although the inflation rate would drop down to low single-digit levels, Tetangco has ruled out the possibility of deflation even with the economy likely to go into recession this year.

Tetangco said inflation is heading downwards but there are still no indications that prices of basic commodities would actually start declining.

The inflation rate is a measure of increases in the prices of basic commodities. The higher the rate, the faster prices are increasing. When price increases slow down, the rate drops and when the inflation rate turns negative, it means prices have actually started declining.

But Tetangco said it is unlikely that the inflation rate would turn negative, especially with the world prices of oil starting to go up again.

“At the moment, we see inflation still trending downward, and falling to within target for both 2009 and 2010,” Tetangco said earlier. “While we have reduced our forecasts on inflation, we still don’t see a situation of deflation.”

“As such, there is room for policy to continue to be accommodative,” Tetangco added. “Our primary mandate is price stability, so monetary policy will continue to be determined by our assessment of the risks to inflation.”

According to Tetangco, the BSP is monitoring domestic and global developments to ensure its monetary policy stance is appropriate. He said officials are particularly watchful of liquidity supply.

“We’re watchful the liquidity level doesn’t become excessive,” Tetangco said. “We are also monitoring international oil price developments to see if there is any rise in speculative activity on oil and other commodities due to the expected rise in global demand.”

The BSP has so far reduced its policy rates by 175 points and monetary officials they could and would probably continue to ease monetary policies as long as inflation was coming down.

However, officials have increasingly cautioned that there are concerns over the level of liquidity in the market although the growth in money supply has slowed down to around 13 percent.

“If we can accommodate growth in the process of reducing the policy rate, we shall be accommodative,” said BSP Deputy Governor Diwa Guinigundo. “The other prong of monetary policy is of course the calibration of domestic liquidity to ensure its availability and to help in the proper functioning of the credit market.”

To the extent that the resulting liquidity would not be excessive and would be consistent with non-inflationary growth, Guinigundo said liquidity measures would be considered.