Government only receives ‘crumbs’ from mining sector, figures say

Despite the hefty sum of profit that mining companies claim bring in to the economy, there remains to be a huge discrepancy between how much these companies make and what actually goes to the government.

Former Commission on Elections (Comelec) Chairman and Save Palawan Movement advocate, Atty. Christian Monsod, recently disclosed that from 2000-2009, the contribution of mining excise taxes—large-scale, small scale, non-metallic operations—to total BIR excise tax collections has only been about 0.7%. “The development role of mining is always described as ‘potential’ because mining has never played a major role in our sustainable development, not even during the mining boom of the seventies and early eighties,” explains Monsod, an esteemed member of the Constitution Commission that drafted the 1987 Philippine Constitution. “What’s even more disappointing is that mining excise taxes relative to total BIR collections is consequently even smaller at 0.07%.”

The Department of Environment and Natural Resources (DENR), Monsod claims, has also revealed very disturbing inconsistencies in terms of the actual figures being reported by the mining sector. “The exports figures that mining companies have reported have apparently exceeded the reported production values of minerals (Php 277 billion from 2000-2009),” Monsod notes. “Aside from this, there has also been a discrepancy between potential excise taxes from mining and the actual collections that the sector has actually collected (Php 7.8 billion from 2000-2009.)

The Social Justice Issue on Mining

The mineral wealth of our country is ‘staggering,’ to borrow the word from the mining industry. But when making their case, the mining industry merely focuses on financial benefits, such as investment flows, export proceeds, government revenues, local contributions, etc. but seldom the costs, whether financial, environmental or social.

“Mineral operations cannot be conducted without affecting and disturbing the land, water, and air surrounding and connected to the site, as well as the various natural resources found on and in them,” tells Monsod. “This simply validates the point that Paul Krugman has on mining operations as activities that socialize costs and privatize benefits. Mining does not only result in the extraction of minerals, but often also necessitates the use, removal, or destruction of non-mineral resources, such as freshwater, timber, and wildlife, which result to health problems, displacement of people, and social divisiveness, among others.”

A recent study conducted by the UP School of Economics also revealed that mining actually has the highest poverty incidence among all the sectors in the country (48.7%). “The mining industry may claim that this figures may be selective and do not establish causality, but it does show an association between mining and poverty that at least raises questions on the claim that mining substantially improves life in their communities,” says Monsod.

Contrary to what the mining sector claims, mining has yet to provide evidence that it can improve the lives of poor Filipino folks. Here’s a good case study: despite more than thirty years of mining operations by Rio Tuba Nickel Mining Corporation, its host community, Bataraza, still remains to be one of the poorest municipalities in Palawan.

The mining business may be serving the interest of the country’s economy but it is absolutely not the solution to widespread poverty and hunger in the Philippines. In fact, mining profits accumulate primarily to mining corporations, most of which are owned by foreign companies based outside the country. Some go to the government, a good chunk goes to the government officials protecting the industry in the area and only trickles are allocated to the poor folks who continue to suffer from the environmental hazards of such devastating and abusive activity.

Sendong’s devastation

Over the weekend, the entire nation became witness to the wrath of Mother Nature as tropical storm “Sendong” (international name: Washi) wreaked havoc in Mindanao, leaving trail of massive destruction with a total of 957 people dead (as of 10am of December 20) and more than 64,000 people homeless.[1]

The devastation that Sendong brought to Mindanao, particularly in the cities of Cagayan de Oro, Iligan, and Dumaguete, certainly goes way beyond the financial benefits that mining companies claim the country stands to gain. “As we speak, thousands of families are weeping from the loss of close to a thousand people in Mindanao due to the flashfloods and landslides that transpired over the weekend,” says Attorney Monsod. “While very few men get richer and richer by the day from the minerals of the earth, here we now see how most of our countrymen suffer from the rape that has been committed against our environment and biodiversity.”