Mining, oil investors still dumping shares
FOUR years after his heated exchange with antimining advocate Gina Lopez in a public forum, businessman Manuel V. Pangilinan has vowed to keep “business as usual” while stock market investors anticipate doomsday for the mining industry once she assumes office as the new environment czar.
Mining and oil stocks took a beating for the second straight day on the local bourses as jittery investors continued to dump shares in mining and oil companies a day after Lopez accepted the offer of Presidentelect Rodrigo Duterte to become the next secretary of the Department of Environment and Natural Resources (DENR).
In a press conference after the AIM for Change conference yesterday, Pangilinan—managing director of First Pacific Co. Ltd. that has interests in mining, infrastructure and telecommunications in the Philippines—said after some initial concerns, businessmen were now generally “welcoming” of the Cabinet members nominated by President-elect Rodrigo Duterte.
At the end of the day, he said, Duterte’s 10-point economic program—likewise warmly received by businessmen—would
be a matter of execution.
“Only time will tell what degree of success this [incoming administration] will achieve in six years,” he said.
‘Elephant in room’
“The elephant in the room is Gina Lopez—I apologize for the comparison—but first of all, let me just say it’s entirely the prerogative of the President to name whoever he wants to name. He has nominated or asked Gina Lopez to be the DENR secretary. So be it, we respect that decision. In his own wisdom, he feels she’s the right person for that post,” Pangilinan said.
On Tuesday, the mining/oil index slumped by 4.09 percent on news that Lopez was asked to be the DENR secretary. The counter slid by another 7.31 percent on Wednesday on confirmation that Lopez had accepted the portfolio.
“What’s our attitude? It’s business as usual,” Pangilinan said.
First Pacific controls Philex Mining, one of the largest mining firms in the country, along with oil exploration arm Philex Petroleum Corp. Yesterday, shares of Philex fell by another 10.86 percent.
Pangilinan acknowledged that Philex would inevitably have to deal with Lopez, whether for permits to operate its existing Padcal mine or to work on additional resources or new mining tenements.
“We just have to work with what we’ve been dealt with. I think the hallmark of business is you work within the environment you’re given,” he said.
He said Lopez should be given a chance to “articulate her policy,” which, in turn, would also reflect the policy of the President.
“We’ve been in this situation before so what’s new?” Pangilinan said.
Asked whether he thought that mining could be a growth driver under the Duterte administration given the current circumstances, Pangilinan said it’s pretty much “work in progress.”
He added it would be best to wait and see how the policy framework would pan out.
“In trying to create a viable and extensive export base, you have to consider mining potential,” Pangilinan said, noting that mining exports last year amounted to around $4 billion.
Rural catalyst
“We are a very mineralized country. We have all that resource underground, so the question really is—do you want to exploit that for the betterment of our people and fulfill one of the tenets (of the Duterte economic agenda) which is to increase exports?” he said.
Pangilinan said he agreed that the government should enforce responsible mining.
“In fact, for business in general, you have to conduct your affairs in a responsible way, whether in mining or telecoms, it’s part of your duty to society,” he said.
The businessman said the Philippines could adopt global standards in responsible mining, referring to the extraction of minerals in an environmentally and socially sound manner.
“If the Canadians, Australians, the South Africans can do it, why can’t the Filipinos do it?” he said. “There will be some costs associated with it but I think it comes with the business.”
Along with programs to boost agriculture and tourism, Pangilinan said the mining industry was one way to coax businesses to invest in the countryside, where about 40 percent of people were living in poverty.
“Mining is not in the cities. It’s out there in the boondocks,” he said.
But if businesses could not make money in the rural areas, thus would not invest in there, he said.
Businesses then should be encouraged and given incentives to focus on the countryside, he said.