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MANILA, Philippines — Passing the mining reform bill is needed to boost the country’s foreign direct investments (FDI) flow, which an analyst of Singapore-based global investment banking and securities firm Goldman Sachs described as “outrageously low.”
In a roundtable meeting on Thursday, May 23, Goldman Sachs chief growth markets strategist Christopher Eoyang said the passing of the mining reform bill is essential in terms of the country’s FDI and sustained economic growth.
“If (mining reform bill) is not part of the overall growth picture of the Philippines, I’m guessing our long-term growth rate forecast would go down,” he said.
Eoyang described the country’s foreign investment level as “outrageously low” compared to other Southeast Asian countries despite the country’s rich mineral resources.
According to the Bangko Sentral ng Pilipinas (BSP), the country’s FDI in 2012 grew by 15.5% to $1.5 billion from $1.3 billion in 2011.
Despite the encouraging growth, the country’s FDI in terms of real value is still one of the lowest in the Southeast Asian region, ranking 7th out of 8 countries with only Cambodia receiving less FDI.
The Philippines, on the other hand, is considered to be the 5th most mineral-rich country in the world for gold, nickel, copper and chromite worth over $840 billion.
Eoyang noted, however, that unlocking this potential will be based on the amount of FDI that will flow in the mining industry, making it a two-pronged issue.
“Mineral wealth in the country is very high. The ability to exploit this potential is reasonably dependent on the FDI. But FDI as well will depend on the policies, particularly the mining reform bill, that the government will pass,” he said.
The Aquino government earlier said they will push for the mining reform bill as a priority measure once the next Congress convene.
The mining reform bill is aimed to improve the share of the government in mining revenues. – Rappler.com