Doing business in PH remains challenging
By The Editorial Board | The Manila Times | January 22, 2023
AS mentioned before in this space, promoting the Philippines to foreign investors should be complemented by faster reforms that make the country more business friendly. Economic managers and others in government should continue building on the progress made, such as the enactment of Republic Act 11032 that is more popularly known as the “Ease of Doing Business” law.
While many Philippine industries require attention, the mining sector sits high on the priority list. The government wants to unlock the potential of mining, which contributes only 1 percent to the country’s gross domestic product.
The industry’s underperformance is a concern. Australia, for instance, estimates that the mineral resources of the Philippines to be worth about AU$1.3 trillion or nearly P50 trillion. Despite its relatively small land area, the Philippines is the fifth most mineralized country in the world, with large deposits of gold, copper, nickel and chromite. But those are largely untapped.
Many have said the Philippines needs substantial investments in the mining sector. The Marcos government also wants foreign firms to invest in plants that would process the minerals here, as that would generate more jobs and maximize the country’s returns.
One company that answered the call is Yinglong Steel Corp. (YSC), which has, according to an advertisement in this newspaper, spent P2 billion on its local operations. The company is a subsidiary of a Chinese firm, Yuanlong Corp., but the YSC is 70 percent Filipino-owned. It was established in 2017, and it claims to be planning to construct a ferro-nickel plant and a steel factory in Zambales this year. That would match the government’s desire for mining firms to establish processing plants in the country, rather than focus on exporting raw minerals that yield smaller dividends for the Philippines.
In its paid space, the YSC called on the government to further improve the ease of doing business in the Philippines. The firm was apparently referring to its dispute against another mining company, which was the subject of opinion columns written by Rigoberto Tiglao. As in any corporate “war,” the issues are complex. In his columns, Mr. Tiglao explains the conflicting rules issued by different government departments, and he warns that the conflict could become an issue for the Marcos administration.
The legal battle will be for the courts or some government office to settle. But more to the point here, the problem could distract from the message that the Philippines is open for business.
The YSC case should also remind officials of the long road ahead, so to speak, to realizing the full potential of the Philippine mining industry.
And perhaps more broadly, more needs to be done to improve the country’s overall investment climate.
Better roadmap
Truth be told, many issues weigh down the mining industry. And the problems are not exclusive to large-scale miners.
Last November, the government reported that 70 percent to 80 percent of small-scale mining companies operate illegally. In the same statement, President Ferdinand “Bongbong” Marcos Jr. expressed concern for the lack of safety of mining workers.
Additionally, environmental issues hound that industry. Public resistance to mining likely stems from its poor record in the Philippines, where accidents have spoiled natural resources and destroyed small communities.
In their defense, mining proponents like to say the Philippines has good laws regulating the industry but lacks the capability to enforce them effectively. The remedy to that, they add, is for the authorities to exercise “political will.” Easier said than done, though.
Also, mining advocates argue that Filipinos only need to dig up the riches beneath their feet to escape poverty. But that sounds off-key because the idea assigns lower value to the abundant natural resources above ground, like trees that supply the air that people breathe and water that sustains life.
Granted, mining has lots of potential. But reality suggests that the industry’s problems are too complex to be captured by general statements. A deeper look into the challenges investors still face and the misgiving of critics should be helpful in crafting a roadmap toward making the Philippines an inviting business haven.
Source: The Manila Times