Mining in Philippines

NTRODUCTION

Brief Historical Background

Digging deep into history, mining in the Philippines is one of the oldest industries in the country. Gold mining in Luzon started even in the 3rd century as reported by the Chinese merchants. Before the advent of the Spanish rule, metals--primarily gold--played an important role in shaping traditions and rituals, in indigenizing certain features of Filipino beliefs, and in developing patterns of wealth, power and authority during the period. (Lopez: 1992)

The spirit of Spanish expansionism was at its crest when it reached the Philippines in the second half of the sixteenth century. The archipelago became the base of further efforts to conquer and evangelize new areas and design new trade routes in search primarily of spices but also of gold and other precious merchandise. (Lopez: 1992) The Spaniards failed to develop mining in the country, but left behind one of the basic building blocks of the present-day mining laws-the Regalian Doctrine. In essence, the Regalian Doctrine stipulates that all minerals and substances underneath all lands, public or private belong to the state. In effect, the law rests on the principle of eminent domain which reserves to the state the right to develop the mines on its own initiative or through private concessions. (Lopez: 1992)

With the Americans, mining industries accelerated as the country's economy strengthened its links to the needs of the industrialized countries like the US. The growth of the mining industry in the Philippines under the Americans may be said to have undergone three stages: (a) 1899-1919; (b) 1920-30; and (c) 1930-42. The first stage could be associated to the rapid technological change during the last quarter of the nineteenth century in the United States. The second period was characterized by the first local gold boom precipitated by the sensational gold finds in Benguet and Balatoc. In the 1930's, the third period, was the era of the second gold boom. In 1935, the Philippines produced more gold than Alaska and its outputs only second to California's. Gold was the third most important commodity in the Philippine export trade.

The gold, copper, and iron ore mining booms of the 1930s and early 1940s were rudely disrupted by the entry of the Japanese invading forces. The war wrought tremendous havoc in the mining industry. The start of the war caused widespread damage in the mining industry. It took almost a decade for the industry to recover.

There were almost 50 mining corporations in the 1950s at least 40 of those were Filipino controlled. And although gold performed poorly in the world market, this was more than offset by the strong performance of copper. The Marcos government pursued mining as "the industry of the 70's." It created a new law that fast-tracked the processing of claims and the development of mining projects; guaranteed foreign loans taken out by local investors in minerals; and developed five-year, 10-year and long term blueprints for the mining industry.

For almost four decades, from 7 November 1937 to 17 May 1974, the mining industry was regulated by the Commonwealth Act No. 137, otherwise known as the Mining Act of 1936. This pre-war statute incorporated many features of the old Philippine Bill of 1902, which, in turn, had been based on the American policy of mineral exploitation set forth in the Federal Mining Act of 1872 of the United States. The colonial character of the mining industry was clearly reflected in the mining laws intended to regulate it. (Ibon Facts and Figures: March 1998)

There were various proposals to overhaul the legislative framework for the industry. The Martial Law Years were considered to be the 'Filipinization' of the local mining industries because direct foreign ownerships were reduced, however, the Marcos faction of the local