Maharlika Fund: Government Faces Push Back On Plan To Use Mining Industry Revenue As Resource

The government's proposal to include earnings from the mining industry as a funding resource for the Maharlika Investment Fund (MIF) has been met with criticism from an environmental group, which cited ecological and social consequences.

"We've seen how communities have been negatively affected by the mining operations – the cases of Marcopper and OceanaGold are clear examples – and how communities are actively opposing mining across the country," environmental organization Kalikasan PNE's national coordinator Jon Bonifacio told the Philippine Daily Inquirer.

The Marcopper mining disaster took place in 1993, when Typhoon Monang caused the collapse of a Marcopper siltation dam, which then resulted in mine wastage spilling over into the Mogpog River. The OceanaGold issue, on the other hand, happened in 2019, after the mining company's license to operate expired that year. The Duterte administration renewed the mine's 25-year license in Nueva Vizcaya, despite protests that included blockades by indigenous groups and locals over alleged environmental violations.

Bonifacio said if the proposal was approved, it would mean the government was "ignoring the social and environment costs" of both foreign and local mining operations in the country.

Bonifacio further argued that the proposal will "only lead to further devastation for our country" unless the Marcos administration recognizes the importance of protecting the Filipino people and the environment they live in.

The environmental group's remarks came after Finance Secretary Benjamin Diokno revealed at the World Economic Forum a proposal to utilize revenues of the mining industry to support the establishment of the proposed sovereign wealth fund.

Diokno said the plan includes utilizing funds generated from mining to invest in infrastructure projects and other programs that have long been overdue. He added that earnings from mining as an "exhaustible resource" will be invested in projects usually funded by other countries "so that the future generation could also benefit."

The Philippines has the fifth most amount of mineral resources in the world. Of the estimated $1 trillion worth of copper, nickel, zinc, silver and gold reserves in the Philippines, only less than 5% has been tapped.

The mining sector accounted for P102.3 billion (approximately $1.8 billion) to the country's 2020 gross domestic product (GDP) even with the pandemic, according to data from the Mines and Geosciences Bureau.

Due to reasons related to watershed damage, the Duterte administration had shut down 23 mining locations in 2017. At the time, the government said the companies involved also committed other violations.

Four years later, former President Rodrigo Duterte lifted a ban on new mineral agreements that reopened opportunities for investments in the country's mining sector. Duterte ordered the environment ministry to establish stronger terms and conditions so mining companies will comply with environmental policies.

President Ferdinand "Bongbong" Marcos Jr. has also ordered the Department of Environment and Natural Resources to require both small and large-scale mining firms to comply with policies especially related to safety for miners.

The sovereign MIF is proposed under House Bill No. 6608, which seeks the establishment of the fund to boost Philippine investments for economic development.