The Philippines has garnered a satisfactory ranking among commodity-rich countries in terms of managing resources, but government inroads ensuring that the state gets a fair share of revenues from extracting natural assets are still needed, a report tracking global resource mismanagement and corruption said.
According to the Resource Governance Index released by New York-based Revenue Watch late Thursday, the Philippines received a “partial” score of 54, ranking 23rd out of 58 countries.
The Philippines “ranked in the top half of countries surveyed on all four components, suggesting that the government has made meaningful progress toward improved resource governance,” read a country brief posted on the Revenue Watch website.
According to the report, the top five countries who have “satisfactory” management of natural resources are Norway, United States, United Kingdom, Australia and Brazil.
The last five with “failing” scores, meanwhile, are Myanmar, Turkmenistan, Equatorial Guinea, Libya and Qatar.
The index, which is to be released annually from this year, is designed to help commodity-rich countries avoid the so-called “resource curse,” when their promising economies grow only slowly because of poor institutional oversight.
It is based on four metrics: institutional and legal setting (20 per cent), reporting practices (40 per cent), safeguard and quality controls (20 per cent) and enabling environment (20 per cent).
Specifically, the Philippines scored 63 out of a possible 100 in terms of institutional and legal setting—the highest on any component.
It is “the product of comprehensive mining legislation but incomplete disclosure requirements,” said Revenue Watch.
Given “poor contract transparency and uneven disclosure of mining data,” the country got a “partial” score of 54 for reporting practices.
“Insufficient checks on the licensing and revenue collection processes” led to a “partial” score of 51 in the safeguard and quality control metric, while “mediocre global rankings on corruption control and the rule of law” resulted in a “failing” score of 46 for enabling environment, said Revenue Watch.
Congessional oversight
Revenue watch said a stronger Congressional oversight is needed. “Lawmakers have conducted investigations of contract negotiations, but their requests for industry information often go unanswered,” the think-tank noted.
With “low royalty rates and an ineffective fiscal system, the government receives only a small share of this resource wealth,” Revenue Watch said.
In July 2012, the Aquino administration stopped issuing mining licenses while it revisited the nearly two-decade old law governing the industry.
Last week, Finance Secretary Cesar Purisima said the Executive Department has finished its version of the mining revenue regime to be presented before the Chamber of Mines, a key private sector stakeholder in the minerals industry.
President Benigno S. Aquino III had asked economic managers to come up with a bill amending the Philippine Mining Act of 1995 amid heightening issues on revenue sharing between the national and local governments.
Revenue Watch noted more than 80 per cent of the world’s major oil and gas-producing and mining countries fail to meet “satisfactory standards” for managing their natural resources. Access the full report here.
