During a luncheon meeting with business groups, Canadian Minister of International Trade Ed Fast emphasized the mining industry’s potential to open up opportunities for economic prosperity in the country. The Philippines sits on an estimated $1 trillion worth of mineral resources, ranked as the fifth most mineralized country in the world. About 30 percent of the country’s total land area is believed to contain important mineral deposits – and many are not aware that we are rank third in terms of gold reserves, fourth in copper and fifth in nickel. Unfortunately, our vast reserves have been largely untapped – something that the President himself had long recognized when he said we can generate more revenues from the extraction of these resources through responsible mining.
Canada is the world’s undisputed leader in the mining industry with almost 50 percent of all mining activities around the world led by Canadian companies, Minister Fast disclosed during his visit. “The Philippines just happens to be one of the most geologically rich places on earth, and responsible mining represents a significant opportunity for this country to drive economic growth,” the Canadian minister said. But while Canada sees the Philippines as a viable investment destination, he also highlighted the challenges that the country faces particularly where the mining industry is concerned.
“Investment requires a welcoming environment, one which is transparent, fair and recognizes the unique nature and cycles of the mining industry,” he said. One of the issues that has been hampering the industry from attracting more investors has to do with the fiscal regime which is deemed not very competitive. Under the Mining Industry Coordinating Council proposal for a new tax regime, mining firms would have to pay either 10 percent of gross revenues or 55 percent of net mining revenues in addition to a certain percentage of excess profit – or whichever is deemed higher.
At the recent forum on Minerals Development Policy, Canadian Chamber president Julian Payne said government’s move to impose higher taxes on mining is a deterrent, noting that the mining revenues received by the Philippine government is much higher than in mining countries like Chile, Peru and Papua New Guinea according to a study by the International Monetary Fund in 2012.
No doubt the Philippines can benefit from the experience of Canada – recognized as a global leader when it comes to responsible, safe and sustainable mining practices. As a matter of fact, more than 400,0000 people across Canada work in the mining industry – and this does not even take into account the employment generated from downstream industries. Those employed in the mining industry also enjoy one of the highest wages compared to other industrial sectors, with mining accounting for $52.6 billion of Canada’s GDP in 2012, according to the Mining Association of Canada.
The Canadian Trade Minister also took note of the Philippine Development Plan 2011-2016 which aims to improve job creation, but the challenges – such as “significant deficit in rail, road and port infrastructure, an investment environment that remains unfamiliar to Canadian investors, and regulatory and trade facilitation challenges” represent significant hurdles for business people, he said.
Over the years, the partnership between Canada and the Philippines has been growing steadily stronger, with more and more Filipinos looking at the North American country as a preferred destination. There are now more than 800,000 Filipino-Canadians living in Canada, with annual remittances amounting to $2 billion or almost one percent of the Philippines’ total GDP.
“Today, Canada-Philippine trade is in the order of $1.7 billion, a good start but relatively modest compared to its underlying potential,” Minister Fast said. It would be a pity to miss this great potential if government fails to listen to the sentiments of foreign investors.
$250 billion bank lawsuit triggers fears
The international banking industry chatter is abuzz with the $250 billion lawsuit filed by a leading group of investors against Deutsche Bank, Wells Fargo, HSBC Holdings, Citigroup, Bank of New York Mellon and US Bancorp.
According to sources, the investors – which include leading global asset management firms Black Rock and Pacific Management Investment Company (PIMCO) – allege that the banks breached their fiduciary duty as trustee when they failed to make bond issuers and lenders buy back substandard loans. PIMCO and Black Rock said the trustee banks were already aware that the bonds had defective loans but that they were conflicted by the fact that those who appointed them had stakes in the firms servicing the loans.
It can be recalled that many Americans lost their homes due to the subprime mortgage crisis that exacerbated the US recession in 2008. Some have called it the housing Ponzi scheme and to this day, homeowners who literally lost the roof over their heads have yet to recover from their huge losses. But while the lawsuit against the banks would strike the affected homeowners as a welcome development, depositors are jittery, with many dreading the thought that they might wake up one of these days to discover that their account balances have been drastically reduced or worse, have vanished into thin air.
‘Firm’ denial
Pancho Villaraza is firmly denying that “The Firm” is behind the P1.5 billion plunder case filed before the Office of the Ombudsman against Makati mayor Junjun Binay. The Firm, which is formally known as the CVC Law or the Villaraza Cruz Marcelo & Angangco Law firm, has long ago split up with former Cabinet Secretary Avelino “Nonong” Cruz Jr. who now heads “the other firm” now known as “CMT” for Cruz, Marcelo and Tenefrancia. Nonong Cruz is widely known to be a supporter of Secretary Mar Roxas.
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