Editorial – Mining’s win-win solution

THE proposed executive order that President Benigno S. Aquino has so far failed to sign because of vehement opposition by the mining industry needs to be reviewed  if only to ensure that its final form would result in a win-win solution for everybody concerned.
Such an executive order would mean additional taxes—for one, a reportedly fresh five percent  of the market value of minerals produced—which the industry considers too horrible to contemplate. One Peter Wallace, advisor for foreign investors , alleges that the industry has been paying enough taxes already and in fact such taxes are among the highest in the Asia Pacific. He even hinted that the executive order would drive away investors, and that probably is what is in the mind of its proponents all along—to discourage new investments and eventually kill big-time mining.
But being among the highest in the “Asia Pacific” region is not the same as “in the world”. Maybe that’s what’s wrong with the setup. How much taxes are paid by the industry in the rest of the world, by the way? Shouldn’t that be the yardstick?
Consider that Finance Secretary Cesar Purisima says that mining taxes in the country totalled only P2 billion in 2011, a mere 0.17 percent of the P1.2 trillion of all the taxes earned by the government in the same year. On the other hand, the Philippines is reportedly host to some $840 billion worth of minerals which, if exploited, is such a staggering amount that the country would certainly go a long way to solving the country’s economy many times over. What’s wrong with that?
God loves this country. But He wants us to make up our minds to extract all that wealth from underground in the most sensible, correct and safest manner. By all means, let us raise mining taxes reasonably  to the extent that it will not necessarily bankrupt the mining firms nor prove grievously disadvantageous to the government.