Mining can boost Phl investment rate to GDP – economist

MANILA, Philippines - Despite an improvement in the Philippine economy, the country’s investment rate to Gross National Product (GDP) remains the lowest in the Asian region, said Dr. Bernardo Villegas, economist and professor of the University of Asia and the Pacific.

In a recent roundtable discussion with the Chamber of Mines of the Philippines (CMP), Villegas said the Philippines invests only less than 20 percent to GDP. This is far lower than the percentage of investment of a typical Asian country at 30 to 35 percent.

“There are not enough people putting money directly into capital, machinery, and all types of fixed assets,” he added. “I’m not referring to investing in stock market operations. Right now what we need are capital-intensive investments which give a lot of business to small and medium-scale industries.”

It is for this reason, Villegas said, that responsible mining should be allowed because the mining industry is one of the most capital-intensive of the sectors.

Although business process outsourcing (BPO) makes a lot of contributions to consumption, it does not really address the country’s low investment rate. 

Villegas, an economist of the Center for Research and Communication, explained that when a mining company operates in remote areas where mineral resources are abundantly located, it has to build farm-to-market roads, water facilities, and sometimes provides electricity in the local community. 

“Without mining investment, local communities would not have these amenities. And it would be prejudicing the poorest of the poor, including the indigenous people, if they don’t have infrastructure that can be made possible by mining companies,” he added.

Evidently, he added, 75 percent of the poor are in the countryside and rural areas so if they are to be benefited, there must be economic activities in the countryside, not in the urban areas.

Villegas also placed mining and agriculture in the same category of having a direct contribution to addressing the poverty problem.

“In fact, if you have urban poor, and you see a lot of them in the Philippines, it’s an utter neglect of the countryside. And if we prevent our mineral resources from being developed, we will see a lot more people in Manila who are squatters and informal settlers. That will definitely be a disservice to the country,” he said.