Geopolitical instability (petroleum), increased complexity of policy change (mining, petroleum), uncertainty over regulations (mining, petroleum), and technically challenging physical environments (geothermal) have aggravated existing risks for the Philippine resources industry. Nevertheless, a changing landscape provides opportunities for resources companies willing to embrace a degree of risk and gain access to future growth areas - technology, business optimization, etc. that will be the key to unlocking future potential.

1. Philippine
Resources
Industry
–
Down
But
Not
Out
A
few
months
into
his
presidency,
Rodrigo
Roa
Duterte
has
already
created
an
impact
in
the
resources
industry.
The
mining
industry
experienced
the
biggest
clampdown
under
the
present
administration
when
the
Department
of
Environment
and
Natural
Resources
(“DENR”)
undertook
an
intensive
audit
of
the
operations
of
metallic
mining
companies
resulting
in
numerous
suspensions
and
notices
of
violations.
The
industry
was
not
helped
either
by
lower
demand
for
bulk
commodities
combined
with
a
bleak
global
outlook
for
mineral
production
resulting
in
a
fall
in
prices.
On
the
other
hand,
global
energy
investments
in
2015
were
also
down
due
to
a
sharp
fall
in
upstream
oil
and
gas
capital
spending.
Petroleum
markets
are
flooded
with
cheap
crude
and
natural
gas
amidst
growing
concerns
about
climate
change.
The
transition
to
a
low-­‐
carbon
energy
system
envisaged
in
the
Paris
Climate
Agreement
is
also
paving
the
way
for
a
shift
in
investments
towards
renewable
energy.
World
Resources
Update
The
forty
biggest
mining
companies
experienced
their
first-­‐ever
collective
net
loss
in
2015.
Some
analysts
hope
that
late
2015
marked
the
bottom
of
the
market,
which
was
followed
by
sporadic
rallies
in
early
2016
but
others
dismissed
these
as
interpretations
of
increased
volatility.
Mining
companies
realised
impairments
of
$53
billion
in
2015
and
have
now
written-­‐off
the
equivalent
of
32%
of
capital
expenditures
spent
since
2010
resulting
in
the
mothballing
of
marginal
projects
and
curtailing
capacity.
(PwC,
Mine
2016:
Review
of
the
Global
Trends
in
the
Mining
Industry)
On
the
energy
front,
petroleum
companies
have
largely
cut
back
on
exploration
over
the
last
two
years
in
an
effort
to
reduce
costs
as
oil
prices
fell
from
over
$100
a
barrel
to
roughly
$50
a
barrel.
While,
the
price
of
crude
has
risen
in
recent
days
after
a
recent
agreement
among
OPEC
members
to
cut
output
modestly
later
in
the
year,
industry
executives
continue
to
express
skepticism
that
individual
member
countries
will
commit
to
curtail
production.
The
silver
lining
is
that
with
the
industry
cutting
investment
in
exploration
and
production
by
$250 billion
in
2015,
and
$70
billion
more
this
year,
it
is
only
a
matter
of
time
before
demand
outstrips
supplies
and
prices
rise
again
significantly,
although
not
until
2018
to
2020
at
the
earliest.
(Clifford
Krauss,
The
New
York
Times,
08
October
2016)
The
World
Energy
Investment
2016
published
by
the
Organisation
for
Economic
Co-­‐operation
and
Development/International
Energy
Agency,
reported
that
oil,
the
largest
primary
energy
source,
slightly
increased
its
share
of
the
global
energy
mix.
Unlike
oil,
gas
demand
growth
remained
subdued
due
to
the
slowdown
of
electricity
demand
and
the
expansion
of
renewables
that
contributed
to
a
fall
in
gas-­‐fired
power
generation
investment.
In
addition,
low
petroleum
prices
led
to
cuts
in
investment
in
upstream
and
transportation
infrastructure,
with
most
major
gas
infrastructure
projects
in
East
Africa
and
the
Eurasian
region
facing
delays.

2. According
to
the
BP
Statistical
Review
of
World
Energy
(June
2016),
global
primary
energy
consumption
increased
by
just
1.0%
in
2015,
similar
to
the
below-­‐average
growth
recorded
in
2014
(+1.1%)
and
well
below
its
10-­‐year
average
of
1.9%
representing
the
lowest
global
growth
since
1998.
Renewables
in
power
generation
continued
to
grow
robustly,
to
nearly
3%
of
global
primary
energy
consumption,
while
coal
consumption
affected
by
climate
policy,
recorded
the
largest
percentage
decline
on
record
falling
by
1.8%
in
2015,
well
below
the
10-­‐year
average
annual
growth
of
2.1%.
Global
coal
production
fell
by
4%,
with
large
declines
in
the
US
(-­‐10.4%),
Indonesia
(-­‐14.4%),
and
China
(-­‐2%).
Coal’s
share
of
global
primary
energy
consumption
fell
to
29.2%,
the
lowest
share
since
2005.
Global
carbon
dioxide
emissions
from
energy
are
estimated
to
have
been
essentially
flat.
Energy
investments
are
not
yet
consistent
with
the
transition
to
a
low-­‐carbon
energy
system
forecasted
in
the
Paris
Climate
Agreement.
While
wind,
solar
PV
and
electric-­‐vehicle
investments
are
broadly
on
a
trajectory
consistent
with
limiting
the
increase
in
global
temperature
to
2°C,
investment
in
other
low-­‐carbon
technologies
is
falling
behind.
Renewable
energy
sources
in
power
generation
continued
to
increase
in
2015,
reaching
2.8%
of
global
energy
consumption,
up
from
0.8%
a
decade
ago.
Renewables
accounted
for
6.7%
of
global
power
generation.
Upheaval
in
the
Mining
Industry
Table
1
shows
the
current
operating
mines
supervised
by
the
Mines
and
Geosciences
Bureau
(“MGB”)
together
with
approve
and
subsisting
mining
tenements.
OPERATING
MINES
45
metallic
mines
in
operation
• 27
nickel
mines
• 6
gold
mines
• 3
copper
mines
• 4
chromite
mines
• 5
iron
mines
•
5
processing
plants
• 2
nickel
processing
plants
(Coral
Bay
in
Palawan
and
Taganito
HPAL
in
Surigao)
• 1
copper
processing
plant
(PASAR
in
Leyte)
• 2
gold
processing
plants
(Philippine
Gold
Processing
and
Refining
Corporation
in
Masbate
and
Mindanao
Mineral
Processing
and
Refining
Corporation
in
Agusan
del
Sur)
More
than
2000
operations
for
sand
and
gravel
and
other
non-­‐metallic
minerals
in
the
country
MINING
TENEMENTS
Major
approved/existing
mining
tenements
• Mineral
Production
Sharing
Agreement
–
339

3. • Special
Mines
Permit
-­‐
2
• Exploration
Permit
–
31
• Financial
or
Technical
Assistance
Agreement
–
6
• Mineral
Processing
Permit
–
46
• Industrial
Sand
and
Gravel
Permit
–
144
• Mining
Patents–
223
165
applications
for
Exploration
Permit
accepted
since
the
lifting
of
moratorium
in
March
2013;
12
were
approved
6
advance
projects
with
approved
DMPF
• Balabag
Gold-­‐Silver
Project
(
Zamboanga
del
Sur)
• Ipilan
Nickel
Project
(Palawan)
• Hallmark/Austral-­‐Asia
Pujada
Nickel
Projects
(Davao
Oriental)
• Kingking
Copper-­‐Gold
Project
of
NADECOR
(Compostela
Valley)
• Boyongan-­‐
Bayugo
Copper-­‐Gold
Project
of
Philex
(Surigao
del
Norte)
• Comet
Dinagat
Nickel
Project
of
Comet
Mining
(Dinagat
Islands)
4
advance
projects
with
DMPF
under
final
review
• Apoland
Limestone
Quarry
Project
(Cebu)
• Rodriguez
Quarry
Project-­‐
Montalban
Millex
(Rizal)
• Sta.
Cruz
Chromite
Project-­‐Shangfil
Mining
(Zambales)
• Tampakan
Copper
Project-­‐
(South
Cotabato)
Table
1.
Mining
Operations
and
Mining
Tenements
(MGB,
April
2016)
The
DENR
just
concluded
its
nationwide
audit
of
metallic
mine
operations
and
recommended
the
suspension
of
twenty
(20)
mining
operations
for
environmental
violations,
unsystematic
mining
methods
and
outstanding
social
issues
on
top
of
the
ten
(10)
others
including
eight
(8)
nickel
producers
that
were
earlier
suspended
for
environmental
violations.
Secretary
Regina
Paz
Lopez
announced
that
the
DENR
would
commence
a
review
of
previously
issued
environmental
compliance
certificates
(“ECC”)
and
mineral
production
sharing
agreements.
Lopez
said
the
review
would
cover
around
eight
hundred
(800)
ECCs
and
added
that
she
wants
to
put
a
moratorium
on
the
opening
of
new
mines.
Lopez
is
reportedly
going
to
do
a
similar
exercise
on
non-­‐metallic
mines
including
coalmines
and
quarries.
In
the
meantime,
the
Chamber
of
Mines
of
the
Philippines
(“COMP”)
is
now
requesting
mine
regulators
for
clear
direction
following
the
exit
of
Undersecretary
and
former
MGB
Director
Leo
Jasareno,
who
was
earlier
deputized
by
Lopez
to
head
the
mines
audit.
As
at
writing,
none
of
COMP’s
member
companies
recommended
for
suspension
has
yet
to
receive
a
show
cause
letter
asking
them
to
explain
why
their
operations
shouldn’t
be
stopped.
Industry
insiders
deplore
the
lack
of
transparency
in
the
manner
the
audits
were
conducted
noting
that
the
names
of
the
suspended
mining
companies
have
been
released
to
the
media
absent
the
detailed
reasons
for
such
suspensions.
At
least
four
miners
recommended
for
suspension
are
currently
nominated
for
the

4. annual
presidential
awards
on
good
mining
practice,
which
recognise
companies
with
exemplary
performance
in
environmental
management,
safety
and
health,
and
social
development
and
management
programs.
The
industry
also
questioned
the
oversight
and
involvement
in
the
mine
audit
of
Jasareno
who
for
the
past
six
years
supervised
many
of
the
suspended
mines
in
his
capacity
as
MGB
director.
In
addition,
the
industry
was
disturbed
with
the
inclusion
in
the
technical
audit
of
non-­‐technical
members
from
some
anti-­‐mining
civil
society
groups.
Eugenia
Victorino,
economist
at
the
Australia
and
New
Zealand
Banking
Group
Ltd.
(“ANZ
Bank”)
said
the
environmental
audit
of
the
mining
industry
could
significantly
cut
production
and
export
revenues.
While
the
ANZ
Bank
sees
limited
impact
on
growth,
the
risk
is
that
more
suspensions
in
mining
production
could
lead
to
a
further
deterioration
in
the
trade
deficit,
resulting
in
a
much
narrower
current
account
surplus
next
year.
Justino
Calaycay,
Jr.
of
A&A
Securities
said
that
the
“crackdown”
on
miners
could
have
an
impact
on
unemployment
and
consumer
spending.
By
his
analysis,
unemployment,
which
currently
stands
at
5.4%,
could
rise
to
between
5.8%
to
6.0%
while
economic
growth
could
drag
to
between
6.0%
to
6.2%
if
and
when
the
uncertainties
clouding
over
the
mining
sector’s
horizon
continues.
The
DENR
is
also
expected
to
embark
on
the
audit
of
coal-­‐fired
power
plants
to
determine
their
compliance
with
environmental
standards.
The
DENR
will
commence
the
crafting
of
audit
guidelines
and
criteria
with
focus
on
the
conditions
given
to
firms
that
obtained
ECCs.
The
ECC
review
will
include
not
only
operating
coal-­‐fired
plants,
but
also
those
undergoing
construction
and
new
applications.
First
on
Secretary
Lopez’s
list
is
Semirara
Mining
and
Power
Corporation,
the
country’s
largest
coal
mine,
which
was
earlier
directed
to
explain
why
its
ECC
for
its
Molave
expansion
plant
in
Antique
should
not
be
cancelled.
It
should
be
noted
that
Lopez’
family
have
investments
in
power
companies
generated
by
renewables,
which
may
put
her
in
a
potential
conflict
of
interest
by
reason
of
this
directive.
Needless
to
say,
suspensions
or
closures
of
existing
coal-­‐fired
power
plants,
cancelling
of
ECCs
of
plants
under
construction,
and
moratorium
on
ECC
applications
will
have
a
tremendous
impact
on
the
country’s
baseload
power
supply
and
prices,
as
coal
accounts
for
about
44%
of
the
country’s
current
total
power
mix.
Figure
1
shows
existing,
committed
and
indicative
coal-­‐fired
power
plants
while
Table
2
lists
existing
power
plants.

5.
Figure
1.
Existing,
Committed
and
Indicative
Coal-­‐fired
Power
Plants
as
at
September,
2016
(DOE)
Table
2.
List
of
Existing
Coal-­‐fired
Power
Plants
(DOE)
On
a
bright
note,
the
MGB
is
now
advancing
its
review
of
the
small-­‐scale
mining
regulatory
framework.
The
MGB
announced
that
it
will
engage
all
provincial
and
city
mining
regulatory
boards
in
a
conference
in
order
“to
thresh
out
issues
hindering
the
formalization
of
the
small-­‐scale
mining
sector
and
provide
inputs
to
enhance
the
existing
policies
toward
a
responsible
industry.”
“The
national

6. review
of
the
existing
rules
and
regulations
on
small-­‐scale
mining
aims
to
increase
the
effectiveness,
efficiency
and
transparency
of
the
governing
bodies
for
the
promotion
of
responsible
small-­‐scale
mining,”
the
MGB
said.
Large-­‐scale
miners
have
often
cited
small-­‐scale
mining
operations
as
one
of
the
main
culprits
in
environmental
violations
and
excesses
because
the
sector
has
been
weakly
regulated
which
allowed
existing
laws
and
regulations
to
be
circumvented.
Upstream
Petroleum
Still
Charting
Stormy
Waters
Unless
new
fields
are
discovered
and
developed,
petroleum
production
in
Northwest
Palawan
is
expected
to
cease
in
2027
when
the
Malampaya
reserves
are
depleted.
Other
existing
fields
are
currently
under
cyclical
production
and
nearing
depletion.
Some
service
contractors
on
the
other
hand
have
filed
for
technical
moratorium
status
as
commercial
studies
indicated
that
under
current
oil
prices,
development
of
the
discoveries
is
not
economically
feasible.
Table
3.
Current
Producing
Petroleum
Service
Contracts
(DOE,
December
2015)
The
constitutional
challenge
against
Service
Contract
No.
46
(“SC
46”)
known
as
the
Resident
Marine
Mammal
Case,
also
continues
to
hound
the
upstream
industry.
The
Supreme
Court
nullified
SC
46
on
ground
that
the
contract
was
not
personally
signed
by
the
President
in
violation
of
Section
2,
Article
XII
of
the
1987
Constitution.
The
DOE
through
the
Office
of
the
Solicitor
General
(“OSG”)
appealed
the
decision
citing
the
qualified
political
agency
principle,
which
allows
the
DOE
Secretary
to
sign
on
behalf
of
the
President
by
virtue
of
a
Special
Authority,
and
consistent
with
a
legal
opinion
given
by
the
Office
of
the
President
on
22
August
1988.
The
industry
is
also
weighed
down
by
Commission
on
Audit
Decision
No.
2015-­‐
115,
affirming
a
Notice
of
Charge
for
income
tax
deducted
from
the
national
wealth
share
of
the
Philippine
Government
and
directing
the
DOE
to
collect
P53
billion
from
the
SC
38
Consortium
(composed
of
Shell
Philippines
Exploration
B.V.
Chevron
Malampaya
LLC,
and
PNOC
Exploration
Corporation).
COA’s
Regional
Cluster
Position
is
that
Presidential
Decree
No.
87
(“PD
87”)
did
not
allow
tax
exemption
nor
tax
assumption.
This
is
under
appeal
with
the

7. Commission
by
the
DOE
through
the
OSG
citing
that
PD
87
allowed
tax
assumption.
The
SC
38
consortium
has
also
brought
the
matter
to
arbitration.
Meanwhile,
the
West
Philippine
Sea
maritime
dispute
continues
to
disrupt
petroleum
exploration
in
the
country
despite
the
Philippines
obtaining
a
favourable
ruling
from
the
Permanent
Court
of
Arbitration,
which
ruled
the
invalidity
of
China’s
Nine-­‐Dash
Line
and
that
it
violated
the
exclusive
right
of
the
Philippines
to
its
Exclusive
Economic
Zone
(“EEZ”)
by
interfering
with
the
petroleum
activities
of
Filipino
vessels
in
the
EEZ.
The
award
of
three
(3)
petroleum
service
contracts
in
the
recently
conducted
Philippine
Energy
Contracting
Round
No.
5
is
still
pending
and
dependent
on
the
resolution
of
these
issues.
The
good
news
in
the
oilpatch
is
the
development
activities
under
SC
49
being
done
by
a
HK-­‐listed
exploration
company
in
Southern
Cebu
following
its
declaration
of
commerciality.
Geothermal
Energy
on
a
Plateau
Geothermal
production
in
the
Philippines
has
seen
a
steady
decline
during
the
past
decade.
Table
4
shows
that
since
2005,
there
was
a
negative
increment
of
145
MWe
in
geothermal
plant
commissioning.
Location
Commissioned
Decommissioned
Northern
Negros
50
Tiwi
Unit
4
110
Northern
Negros
50
Tiwi
Unit
3
55
Botong
20
Maibarara
20
Nasuji
20
Nasulo
30
Bacman
1
Re-­‐engineering
10
Total
110
255
Table
4.
Development
increments
and
plant
decommissioning
since
2005
(DOE)
The
DOE
in
coordination
with
the
private
industry
realizes
that
it
can
no
longer
hope
to
discover
conventional,
“elephant-­‐sized”
geothermal
resources
as
these
have
been
fully
accessed
and
evaluated
by
the
former
state-­‐owned
energy
development
and
public
utility
companies.
There
is
now
an
urgency
to
apply
new
development
technologies
to
what
previously
were
considered
to
be
second
tier
resources
e.g.
technologies
that
can
utilize
acidic
and
young
geothermal
systems,
development
of
low
enthalpy
geothermal
systems,
direct
use
of
small-­‐scale

8. geothermal
energy
technologies
(for
example,
modular
well
head
turbines),
and
hybrid
technologies.
With
an
appropriately
structured
feed-­‐in
tariff
(“FIT”)
rate
that
will
provide
guaranteed
payment
to
investors
through
a
universal
charge,
these
acidic
and
lower
enthalpy
resources
can
be
developed
to
generate
electricity.
In
order
to
address
the
barriers
related
to
costs
and
resource
exploration
risks
faced
by
geothermal
energy
developers,
the
National
Geothermal
Association
of
the
Philippines
(“NGAP”)
calls
for
the
coverage
under
the
FIT
program
of
geothermal
emerging
technologies
currently
not
commercially
viable
under
existing
market
and
pricing
structures.
Under
the
Renewable
Energy
Act
of
2008
(“RE
Act”),
FIT
is
provided
to
solar,
wind
and
other
renewable
energy
sources
considered
“emerging
technology”,
to
the
exclusion
of
geothermal.
Some
geothermal
power
plant
projects
may
languish
because
of
the
lower
cost
of
coal-­‐fired
power
generation
but
this
can
be
addressed
by
prompt
implementation
of
the
Renewable
Portfolio
Standard
and
Green
Energy
Option
under
the
RE
Act,
which
will
incentivize
utilities
to
contract
for
geothermal
power.
On
a
bright
note,
the
DOE
is
receptive
to
the
proposal
of
including
geothermal
emerging-­‐technology
for
inclusion
in
the
FIT
system,
based
on
the
recommendation
of
the
National
Renewable
Energy
Board,
which
must
carry
out
an
extensive
study
on
the
proposal.
Following
a
series
of
public
consultations
with
RE
stakeholders,
the
Senate
Committee
on
Energy
is
looking
to
the
idea
of
amending
the
RE
Act
and
formally
requested
NGAP
to
submit
its
position
paper
on
the
proposal.
Facing
the
Constantly
Shifting
Regulatory
Headwinds
On
the
policy
front,
the
Duterte
administration
through
its
ten-­‐point
socio-­‐
economic
agenda
seeks
to
expedite
permitting
approvals,
which
hopefully
can
ease
the
bottlenecks
in
the
highly
regulated
resources
industry.
However,
expedited
regulatory
actions
and
permit
approvals
continue
to
be
on
top
of
the
wish
list
of
resource
developers.
Table
5
lists
current
petroleum
service
contracts
under
notices
of
Force
Majeure
by
operators
by
reasons
of
permitting
issues
and
regulatory
uncertainties.
Service
Contract
No.
Location
Operator
Commitment
Status
53
Mindoro
(Mindoro-­‐
Cuyo)
Pitkin
Petroleum
Ltd.
Under
Force
Majeure
due
to
issue
with
Indigenous
Peoples
in
the
area
57
N.
Calamian
(NW
Palawan)
PNOC-­‐EC
Under
Force
Majeure
due
to
a
pending
Farm-­‐In
Agreement
with
CNOOC
for
approval
by
the
President
58
W.
Calamian
(NW
Palawan)
Nido
Petroleum
Philippines
Pty.
Ltd.
Under
Force
Majeure
due
to
the
dispute
in
the
West
Philippine
Sea
72
Recto
Bank
Forum
(GSEC
101)
Ltd.
Under
Force
Majeure
due
to
the
dispute
in
the
West
Philippine
Sea

9. 75
NW
Palawan
Philex
Petroleum
Corporation
Under
Force
Majeure
due
to
the
dispute
in
the
West
Philippine
Sea
Table
5.
Petroleum
Service
Contracts
Under
Force
Majeure
(DOE)
Table
6
on
the
other
hand,
shows
geothermal
service
contracts
currently
bogged
down
by
issues
in
relation
to
claims
by
indigenous
peoples
(IPs),
opposition
from
local
government
units,
and
area
conflicts
with
national
parks.
Project
Name
Contract
No.
Location
Potential
Capacity
(MWe)
Permits
and
Clearances
Issues
Sal-­‐Lapadan-­‐Boliney-­‐
Bucloc-­‐Tubo
GSC
2011-­‐12-­‐209
Abra
TBD
IP
and
National
Park
Kalinga
GRESC
2010-­‐03-­‐24
Kalinga
60
IP
and
LGU
Cagua-­‐Baua
GRESC
2011-­‐12-­‐028
Cagayan
40
IP
Cervantes
GSC
2011-­‐12-­‐030
Ilocos
Sur/
Mt.
Provice/
Benguet
TBD
IP
East
Mankayan
GRESC
2013-­‐11-­‐041
Ifugao/
Benguet/
Mt.
Province
TBD
IP
Daklan
GRESC
2010-­‐02-­‐017
Benguet/
Nueva
Vizcaya
60
IP
Negron-­‐Cuadrado
GRESC
2013-­‐02-­‐040
Zambales/
Pampanga
TBD
IP
Puting
Lupa
GRESC
2014-­‐01-­‐349
Laguna
TBD
Protected
Area
Southern
Bicol
GRESC
2010-­‐02-­‐015
Sorsogon
40
LGU
West
Bulusan
GSC
2013-­‐11-­‐048
Sorsogon
TBD
LGU
Mandalagan
GSC
2012-­‐01-­‐036
Negros
Occidental
20
LGU
Balingasag
GSC
2012-­‐01-­‐039
Misamis
Oriental/
Bukidnon
20
LGU
Mt.
Zion
GSC
2012-­‐01-­‐037
North
Cotabato/
Davao
del
Sur
20
IP
and
National
Park
Mt.
Zion2
GSC
2012-­‐01-­‐037
North
Cotabato/
Davao
del
Sur
20
IP
and
National
Park
Mt.
Talomo/Tico
GSC
2013-­‐11-­‐046
North
Cotabato/
Davao
del
Sur
TBD
IP
and
National
Park
Mt.
Sibulan/
Kapatagan
GSC
2013-­‐11-­‐047
Davao
del
Sur
TBD
IP
and
National
Park
Table
6.
Geothermal
Exploration
Projects
with
Permitting
Issues
(DOE)
Recently,
resource
developers
have
to
contend
not
only
with
the
DENR
but
also
with
the
Department
of
Agrarian
Reform
(“DAR”),
which
seeks
to
to
declare
a
two-­‐year
moratorium
on
land
conversion
and
upholding
the
validities
of
Certificate
of
Land
Ownership
Award
(“CLOA”)
on
mineral
lands.

10. The
proposed
moratorium
will
prevent
the
conversion
of
agricultural
land
to
industrial
land,
intended
for
declaring
mineral
lands
and
building
power
facilities.
Business
and
economic
organizations
composed
of
the
Philippine
Chamber
of
Commerce
and
Industry,
the
Foundation
for
Economic
Freedom,
the
Makati
Business
Club,
the
Management
Association
of
the
Philippines,
the
Philippine
Exporters
Confederation,
the
American
Chamber
of
Commerce
of
the
Philippines,
the
European
Chamber
of
Commerce
of
the
Philippines
and
the
Japanese
Chamber
of
Commerce
of
the
Philippines,
warned
in
a
joint
statement
that
the
plan
of
the
DAR
would
be
detrimental
to
rural
development
and
creation
of
more
jobs.
The
group
noted
that
there
are
“lands
classified
as
agricultural
that
are
low-­‐yielding
and
unproductive
and
preventing
conversion
of
such
lands
to
more
productive
uses...
goes
against...
development
of
unproductive,
idle
agricultural
land
that
could
be
better-­‐used
for
commercial,
residential
and
industrial
uses.”
DAR
Secretary
Rafael
Mariano
said
he
is
also
bent
on
upholding
the
validity
of
issued
CLOAs,
even
if
it
would
affect
mining
sites.
Mariano,
a
militant
farmer
and
former
chairman
of
the
Kilusang
Magbubukid
ng
Pilipinas,
added
that
he
is
not
keen
on
canceling
the
CLOAs
issued
within
the
Tampakan
Copper-­‐Gold
Project
in
Southern
Mindanao.
Mariano
is
one
of
the
progressives
appointed
to
the
Duterte
cabinet
and
a
vocal
critic
of
the
mining-­‐liberalization
policy
under
the
past
two
administrations.
Mariano
assured
that
the
DAR
is
coordinating
with
various
agencies
to
ensure
that
no
rights,
whether
that
of
IPs
or
farmers,
shall
be
trampled
upon.
Lopez
also
assured
that
no
agricultural
land
would
be
covered
by
mining.
Mariano
said
his
agency
would
initiate
an
interagency
meeting
between
the
DAR,
DENR,
Department
of
Interior
and
Local
Government
and
the
National
Commission
on
Indigenous
People
to
discuss
the
resolving
issues
involving
conflicting
land-­‐use
policies.
Conclusion
The
cyclical
and
unpredictable
nature
of
the
industry
makes
any
effort
to
predict
prices
based
on
current
prices
and
volatility,
a
difficult
if
not
impossible
undertaking.
Geopolitical
instability
(petroleum),
increased
complexity
of
policy
change
(mining,
petroleum),
uncertainty
over
regulations
(mining,
petroleum),
and
technically
challenging
physical
environments
(geothermal)
have
aggravated
existing
risks
for
the
local
industry.
It
is
highly
likely
that
the
present
administration’s
regulation
of
the
industry
will
continue
to
intensify
and
the
industry
is
clearly
apprehensive
by
the
way
the
government
approach
its
regulatory
agenda.
Nevertheless,
a
changing
landscape
provides
opportunities
for
resources
companies
willing
to
embrace
a
degree
of
risk
and
gain
access
to
future
growth
areas
-­‐
technology,
business
optimization,
etc.
that
will
be
the
key
to
unlocking
future
potential.
Fernando
“Ronnie”
Penarroyo
is
the
Managing
Partner
of
Puno
and
Penarroyo
Law
Offices
(www.punopenalaw.com).
He
specializes
in
Energy
and
Resources
Law,
Project
Finance
and
Business
Development.