Isles of Gold:

Potential versus Reality

The Philippines is one of the worlds most blessed countries. Despite having a small area, our
country holds gold, copper, and chromite deposits that are among the worlds largest. We also have
notable amounts of iron, nickel, silver, sulfur, clay, limestone, marble, silica and phosphate.
Although these various mining products are produced and exported, gold remains as the most
important product of the country, which contains the worlds second largest gold reserves. Even in
ancient times, the Philippines is already known for this mineral. The geographer Ptolemy had
referred to it as Chryse meaning Isles of Gold and some scholars believe that the islands of the
country, particularly Luzon and Mindanao, are among those that constitute Suvarnadvipa, a land
mentioned in ancient Indian texts which also means Islands of Gold. Even some believe that it is
the biblical Ophir from which gold used to build the temple of Jerusalem is shipped from.

According to the estimates of the Philippine Economic-Environmental and Natural Resources

Accounting (PEENRA), we have 7 billion metric tons of metallic reserves and 50 billion metric tons
of non-metallic reserves. From mining these reserves alone, we could generate an income that could
even totally fix the poverty issue, as stated by the National Statistical Coordination Board(NSCB)
and the US Department of State report on Philippine economy. The untapped deposits, according
to the latter, could amount to around two to four trillion USD. Former NSCB Secretary General
Romulo Virola blogged in 2012 that for the previous year, from gold reserves alone, the country
could tap more than 65.1 times the income gap of 2011, the amount needed to completely eradicate
poverty in the country.

However, these potentials are very far from the present state of the mining industry in the
Philippines. Although the countrys gold reserves rose to 196.18 tonnes in the second quarter of
2016 from 195.91 as reported by the World Gold Council, mining, together with quarrying, still
remains the least contributor to the domestic economy.

During the 1960s to 1980s, the mining industry rose to a boom, following a post-war demand on
metals. After this, a decline in the industry was observed, and although it got back on track, its
present state is only a small fraction of what the countrys mining industry used to have. This decline
may be attributed into several factors such as the short-term weakening in global prices of
commodities due to the decreasing demand of nickel, copper and gold by China, high production
costs, lack of mining infrastructures and government support and promotion. In addition, local bans
have been put to many mining companies primarily because of environmental incompliance,
marginalization of indigenous people and unjust tax revenues distribution, and displacement of
farmers and fishermen. A new moratorium on mining applications was also imposed July this year.

However, several steps could still be made to enhance the mining industry in the country. Sufficient
knowledge on proper mining techniques and technologies and increased awareness of how
responsible mining is possible and what it can do for our economy would make the industry more
value adding. A tax revision for foreign investors may also be needed, as advised by IMF. According
to it, the payoffs of the mines are too big that high taxes for foreign companies wouldnt scare the
investors away. Advancement of the industry from a purely extractive one by creating mineral
processing plants is also necessary because exporting of raw materials hinders productivity.
Increased support from the government by reinforcing laws for mine employees health, safety,
welfare and benefits.
References:

(1) http://www.thephilippinepride.com/washington-says-ph-has-trillions-of-dollars-in-gold-reserve/
(2) http://asiasociety.org/new-york/exhibitions/philippine-gold-treasures-forgotten-kingdoms
(3) https://books.google.com.ph/books?
id=Uz20gi19kTEC&pg=PT184&lpg=PT184&dq=chryse+ptolemy+philippines&source=bl&ots=4
x8YLCbxzj&sig=hMzsuzvLPBvseclmsWLeJsGiod4&hl=en&sa=X&ved=0ahUKEwj8-
fG8hY_QAhWGxbwKHZmPBD0Q6AEILTAD#v=onepage&q=chryse%20ptolemy%20philippin
es&f=false
(4) http://nap.psa.gov.ph/peenra/results/mineral/default.asp
(5) http://www.rappler.com/business/3696-gold-reserves-can-wipe-out-poverty-in-philippines-nscb
(6) http://www.tradingeconomics.com/philippines/gold-reserves
(7) http://www.bmiresearch.com/philippines
(8) https://corporatewatch.org/news/2010/nov/09/matrix-philippine-mining-industry
(9) http://business.inquirer.net/211825/mining-firms-balk-new-review-moratorium
(10) http://dirp3.pids.gov.ph/ris/pn/pidspn1118.pdf
(11) http://www.forbes.com/sites/ralphjennings/2015/04/05/trillion-dollar-goldmine-for-
philippine-economy-emerging-from-murky-pit/
(12) http://world.time.com/2012/09/13/sitting-on-a-gold-mine-will-mining-make-or-break-the-
philippines/