Philippine Underground Resources — A Comprehensive Assessment

As of 2026-08-31 · Updated 2026-08-31 · Section: Mineral Resources · 日本語版

The question: why hasn't the Philippines grown rich from its resources, despite being so richly endowed with them?

This assessment's answer: the premise of being "richly endowed" is itself half myth, and the other half — the real wealth — is held back by four gates: institutions, local politics, electricity, and geopolitics. And the Philippines is not a resource-dependent economy. It is a country built on remittances and IT-BPM. So the classic "resource curse" thesis applies to this country only by half.

0. Summary

1. The reality behind "resource superpower" — a look at the numbers

1-1. Big numbers and small numbers

注 Note the difference in what these figures actually measure. MGB's "0.51%" is based on metallic and non-metallic mining production value, while PSA's "0.95%" is the "mining and quarrying" line in the national accounts, which includes things like gravel extraction. Either way, the conclusion of roughly 1% does not change.

1-2. The asymmetry between 8.75% of exports and 0.51% of GDP — the starting point for everything

The gap between these two numbers is the single most important finding of this assessment. Mining accounts for nearly 9% of total exports, yet only 0.5% of that translates into GDP. Three reasons explain the gap.

1. What's being exported is ore and concentrate. The value-added is created at the smelters of the buyer countries (China, Indonesia, Japan, South Korea). The Philippines only receives the price of the raw material.
2. Mining is capital-intensive and generates little employment. 290,000 jobs (0.5–0.6% of employment) is an order of magnitude below IT-BPM's 1.9 million (2025 / IBPAP).
3. Much of the gain is offset by imports. Capital goods, fuel, and chemicals must be imported, so net foreign-exchange earnings are far smaller than the export figure suggests.

1-3. Comparison — the Philippines is not a "resource nation"

Remittances alone, and IT-BPM alone, each bring in more than five times the foreign exchange that mining does. The Philippines is "a country that earns foreign exchange by exporting people," not "a country that earns foreign exchange by exporting ore." This fact fundamentally limits how far the "resource curse" argument discussed later can be applied.

1-4. 注 Questioning the "resource superpower" myth itself

"World's 2nd-largest gold reserves," "world's 5th most mineralized country," "$1 trillion in undeveloped minerals" — none of these claims trace back to a primary source (see also "Gold Reserves and Deposits" and "Rare Earths and Strategic Minerals").

The one claim that is genuinely true is nickel. The Philippines is the world's 2nd-largest producer (9.5% of world output / USGS 2024), and accounts for about 95% of world nickel ore exports (PNIA). Next come cobalt (7th in the world, a byproduct of nickel HPAL) and scandium (7–8 tonnes out of 15–20 tonnes of world supply). Beyond that, any other "world No. X" claim should not be cited.

注 So the premise of the question needs to be half-revised. The Philippines is not "a country richly endowed with resources" — it is "a country blessed with nickel, holding a handful of large copper-gold deposits." Its geological potential genuinely is high (a rare double subduction zone straddling the Pacific Ring of Fire). But the self-image of "world-class resource superpower" is not backed by the statistics.

2. The failure to move downstream — exporting concentrate, buying back refined metal

2-1. What happened in 2025–2026 was not "progress" — it was "regression"

注 Sequence matters here. The government made "moving downstream" a national strategy with EO 122 in August 2026. Yet just two months earlier, the expected closure of Coral Bay HPAL — the very symbol of moving downstream — was disclosed, and the country's only copper smelter had already shut down a year and a half earlier. Policy and reality are moving in opposite directions.

2-2. "Copper prices are high, yet the copper smelter is collapsing" — the blind spot called TC/RC

The direct cause of PASAR's shutdown was not the price of copper. It was the collapse of treatment and refining charges (TC/RC).

A negative TC/RC means a smelter is effectively paying the mine to let it process the concentrate. This results from a global surge in smelting capacity (especially in China) colliding with a shortage of concentrate — it is not a problem unique to PASAR. 注 But this reveals a structural asymmetry: the mines prosper on high copper prices while the smelter collapses. The further downstream the Philippines moves, the more it is exposed to factors it cannot control — China's smelting capacity, global concentrate supply and demand.

2-3. "A coal-producing country that imports coal" — the same pattern repeating

The reason is not quantity but quality. Domestic coal is sub-bituminous with low calorific value (reportedly around 4,300–5,000 kcal/kg, 注 the official specification is unconfirmed) and has strong slagging and fouling tendencies. Supercritical plants are designed around high-calorific coal and cannot run on domestic coal alone. Imports don't just make up a quantity shortfall — they also function as a blending material.

The same pattern shows up in copper and nickel too. Imports of refined copper (cathode) come 98% from Japan on a value basis (2020–2024 / OEC). The Philippines ships out domestic concentrate, has it turned into metal at Japanese smelters, and buys it back.

2-4. The decisive difference with Indonesia

This contrast is the central piece of evidence in this assessment. Indonesia increased its processed-nickel exports by 20–25 fold in a decade. Over the same period, the Philippines remained a country selling $1.47 billion worth of raw ore.

注 But this does not mean "the Philippines should simply copy Indonesia's approach." The industry group PNIA's objections have real merit: ①there is no domestic capacity (smelting capability) to receive the ore, ②electricity costs, infrastructure, and permitting must be solved before a smelter can be built, ③if a ban five years out is legislated, exploration investment stops the moment it's announced. Indeed, when Indonesia partially banned exports in 2014, the receiving capacity wasn't there either, and it eased the ban in 2017. A ban only works when paired with a clear path to building receiving capacity — otherwise it is simply self-harm.

And an ironic result has followed. Because Indonesia cut its own production quota (RKAB) by about 30% in 2026, Indonesian smelters have been buying up Philippine ore. The Philippines, having abandoned its export ban, has now become a raw-material supplier to Indonesia (exports to Indonesia: 215,000 wmt in 2023 → 15.45 million tonnes in 2025).

3. Institutional instability — 30 years of reversals with every administration

3-1. Timeline of reversals

 March 1995     Mining Act (RA 7942) enacted — Ramos administration. Full opening to foreign investment
 March 24, 1996  Marcopper mine disaster (Marinduque Island)
                Over 1.6 million m³ of mine tailings spill into the Boac River. Public opinion turns decisively
 December 2004  Supreme Court upholds constitutionality of FTAAs (100% foreign ownership) on reconsideration
July 2012      Executive Order No. 79 (EO 79) — Aquino administration
                "No new mineral agreements shall be signed until a new revenue-sharing law is enacted"
                注That new law took 9 years to pass
Feb–Apr 2017   Environment Secretary Lopez orders closure of 23 mines; DAO 2017-10 bans open-pit mining
 May 2017       The Commission on Appointments rejects and removes her. The closure orders go largely unenforced
April 14, 2021 EO 130 — Duterte administration. Lifts the 9-year moratorium
December 23, 2021 DAO 2021-40 — repeals the open-pit mining ban
September 4, 2025 RA 12253 (Enhanced Fiscal Regime Act) — Marcos administration. A 13-year-long settlement
August 21, 2026 EO 122 — national policy framework for critical minerals, MICC restructuring

注 Two common errors should be corrected here. - What EO 130 (2021) lifted was the moratorium, not the open-pit mining ban. The open-pit ban was repealed by DAO 2021-40 (December 23 of the same year). - The mining fiscal reform law is RA 12253, not RA 12022 (the Agricultural Economic Sabotage Prevention Act).

3-2. How investors reacted — exploration budgets as a "thermometer"

The cost of institutional instability shows up most brutally in exploration budgets.

2012, the peak year, is the very year EO 79 was issued. From there, exploration budgets collapsed by nearly 90% within a decade. This is no coincidence. Given that "exploration is production ten years down the road," a country whose rules flip every ten years cannot attract exploration capital.

And when exploration stops, mines die a few years later. The Runruno gold mine (Nueva Vizcaya) is the textbook case.

 August 2025   Associated company Woggle obtains an exploration permit in Dupax del Norte
             → Residents immediately set up barricades and protest
 Later in 2025  Citing "security concerns and local opposition," MGB
             suspends the exploration permit as force majeure
 February 18, 2026 "We cannot drill to establish new economic reserves.
             Runruno will mine out its current ore body and close."
 March 2026   DOLE begins assisting 1,296 workers facing separation
 End of 2026   Scheduled closure

Lesson: in the Philippines, "exploration permits" are more politically fragile than "operating permits." Exploration offers residents no visible benefit, so opposition concentrates on it first. And once exploration stops, the mine dies a few years later.

3-3. 注 Will RA 12253 and EO 122 change things? — both sides of the argument

This assessment's judgment: RA 12253 and EO 122 are "necessary" but not "sufficient" conditions. They have genuinely raised the predictability of the regime by one notch, but the real reason investment is frozen lies in the next chapter.

4. The layered veto structure — even when the national government approves, the localities can stop it

4-1. Who can say "no"

4-2. What the Supreme Court settled, and what it left open

Province of Occidental Mindoro v. Agusan Petroleum (G.R. No. 248932, decided January 14, 2025 / published May 14)

Ruling: ①the "laws" referred to in Section 19 of the Mining Act do not include local ordinances; ②police power is subordinate to national law; ③a local government can deny a specific project, but cannot impose a blanket ban on all large-scale mining within its jurisdiction (an outright ban is overbroad and invalid); ④environmental concerns should be handled through the EIA process.

注 So did this invalidate Palawan's 50-year moratorium? No, it did not. The clever part is that the ordinance is framed not as a "ban on mining" but as a "suspension of the province's endorsement." Palawan also has the special legal framework of the Strategic Environmental Plan Act (RA 7611) and the PCSD. As of August 2026, the ordinance remains in force.

The practical conclusion: while the legal basis for blanket-ban ordinances has been undercut, local governments still hold the tools of ①denying individual projects, ②withholding endorsement, and ③withholding Sanggunian approval. The de facto veto has not disappeared.

4-3. Why Tampakan has not moved in 30 years

One of the largest undeveloped porphyry copper-gold deposits in Southeast Asia (resources of 2.94 billion tonnes, containing 15 million tonnes of copper and 17.6 million ounces of gold / 注under the JORC 2004 standard as of end-2011, with no updated public disclosure since).

 1990       Discovered by Western Mining
 2001       FTAA transferred to Sagittarius Mines (SMI)
2010       South Cotabato passes a provincial ordinance banning open-pit mining → de facto halt
2015       Glencore withdraws (citing regulatory uncertainty)
 2017       Nationwide open-pit ban (DAO 2017-10)
 December 2021  Nationwide ban lifted (DAO 2021-40)
May 2022   Provincial board amends the environment code, deleting the open-pit ban clause
 February 2025  DENR extends the FTAA to 2038, a 6-year extension
 October 2025  SMI seeks a "strategic partner." Production-start target pushed back to 2028
August 20, 2026 Board approves integration into Dominion Holdings (DHI)
             Sy family + Consunji family + Alcantara group. Authorized capital rises from ₱3.42 billion to ₱30 billion

What this timeline shows is that "local veto power drove out international capital and replaced it with domestic conglomerates." Glencore left, and the parties now moving to take control are the Philippine conglomerates SM, DMCI, and Alcantara. 注 However, as of mid-2026 the ECC (Environmental Compliance Certificate) has still not been issued, and the Diocese of Marbel's lawsuit to void the FTAA extension is still ongoing, overlapping the ancestral domain of the B'laan people. "Production starting in 2028" remains merely the operator's own target.

注 Note also that two figures circulate for the share of national territory covered by mining tenements. MGB puts approved tenements at 787,279 ha, or 2.62% of national territory, while a joint study by Global Witness and Kalikasan claims that "one-fifth of the country is covered by mining tenements." The latter is thought to use a broader definition that includes pending and applied-for areas. The impression created differs entirely depending on which figure is cited, so the definition must always be stated.

5. The environmental and human toll

5-1. Marcopper — 30 years for half the compensation to arrive

Nothing illustrates the timescale of mining harm in the Philippines as cruelly as this timeline. Thirty years. At least 36 deaths are attributed to heavy-metal contamination, and the mine remains closed. 注 The settlement document states that "Marcopper Mining was at all times the owner and operator of the mine," leaving the question of the parent company's responsibility unresolved to the very end.

5-2. A lineage of accidents

注 There is a crucial asymmetry in the Itogon case. DENR itself concluded that "the landslide was not caused by mining activity" (MGB-CAR found no mining operations at the point of failure — extreme rainfall combined with a fault zone and steep slope). Yet DENR still ordered a halt to all small-scale mining across the entire CAR region and revoked all mining permits, closing 539 tunnel entrances within two days. "Disaster → blanket shutdown → legalization stalls → illegal mining returns" is the typical cycle in this field. Without grasping this asymmetry, one cannot understand the anger of local miners.

5-3. Killings of environmental activists — 12 straight years as Asia's deadliest

注 A note on how these are counted. Global Witness used to fold "disappearances of over 6 months" into the killings tally, but now counts them separately — which is why "7 killed" and "8 cases" both appear. The domestic human-rights group Karapatan, meanwhile, recorded 14 killings of human-rights activists in 2024 — figures differ across organizations.

And there is a practice called "red-tagging." It labels opposing activists as communists or terrorists, exposing them to extrajudicial killing, detention, criminal prosecution, and asset freezes. This is the most violent expression of the problem that "social acceptance cannot be obtained."

6. The economy that doesn't show up in the statistics

6-1. "70%" and "1.26%" are both correct

This is not a contradiction. The former is an estimate of what is actually being mined; the latter is what is officially recorded through the central bank, BSP. The entire gap disappears into informal circulation.

6-2. How taxation pushed gold into the underground economy — the clearest case of causation

  2010       BSP's domestic gold purchases = over 900,000 troy oz
July 2011   BIR begins enforcing taxation in earnest (2% excise + 5% withholding = 7% combined)
  2018       BSP purchase volume = 0.33 tonnes
  2019       BSP purchase volume = 10,207 troy oz = −99% versus 2010
March 2019  RA 11256 enacted (exempts sales to BSP from income tax and excise tax)
  2020       BSP purchase volume = 115,800 troy oz = about 11x the previous year

A 7% tax pushed over 90% of the country's gold into the underground economy. The moment the tax was removed, volumes rebounded 11-fold in a single year. This is one of the clearest examples of cause-and-effect in the history of Philippine tax policy.

注 That said, this is not a "solved" problem. The 115,800 troy oz recorded in 2020 is still only a bit over one-tenth of the 900,000-plus troy oz seen in 2010. The remaining barrier is not taxation but the cost and slowness of the legalization process.

6-3. Institutions haven't kept pace — 53 sites in 34 years

The original vision of RA 7076 (1991) was a Minahang Bayan (People's Small-Scale Mining Area) in each of the country's 1,637 municipalities. 34 years later, there are 53–63 such sites.

Benguet province alone has about 8,000 operations and roughly 30,000 people involved (per the province's environmental office). "Small-scale mining = essentially unregistered and illegal" has become the effective default.

In August 2026, DENR created the Interim Small-Scale Mining Contract (ISSMC, 2 years, non-renewable) under DAO 2026-08. Notably, it explicitly writes into the contract that "recovered gold must be sold to BSP only." This reads as the institutional side trying to close off smuggling routes through the contract itself.

6-4. 注 The scale of smuggling — figures that should not be stated as fact

Estimates in circulation: 79% of gold mined from 2005–2015 was smuggled to Hong Kong (based on UN Comtrade, Manila Times 2017) / up to 90% of small-scale gold output is smuggled, mainly to China (Reuters and others) / a BSP official has said "up to 95% of gold trading has shifted to the black market."

注 All of these are estimates from 2012–2017, and no new quantitative estimate for 2025–2026 could be confirmed. The current ratio should not be stated as established fact.

The same problem exists with mercury. A 2025 material-flow study commissioned by DENR-EMB found that mercury use in ASGM far exceeds official import statistics. The Philippines has no mercury mines, and mercury use has already been completely banned by EO 79 (2012) and DAO 2015-03. The gap, therefore, is smuggling. The issue is not legislation but enforcement at the border and in distribution. (In April 2026, about 760 bottles of liquid mercury hidden in carpets were seized in Jakarta, bound for Davao City.)

6-5. Aggregates — another "invisible mining" sector

注 While metallic mining gets all the attention, it is actually the non-metallic aggregates sector that is most deeply entangled with local politics and corruption. Permitting authority rests, in principle, with the provincial governor (for commercial gravel extraction of 5 ha or less), and under Section 138 of the Local Government Code, tax revenue is split 30% province / 30% municipality / 40% the barangay of extraction. This structure — "40% flows to the barangay" — is the direct reason local politicians flock to gravel concessions. Yet the governor of Pangasinan has said that quarrying brings the province only about ₱12 million a year, suggesting the formal tax take is small, and the informal income around it is the real prize.

And this connects directly to the flood-control corruption scandal. Excessive riverbed extraction → riverbed lowering and higher flood risk → flood-control budgets flow in → the aggregate for that construction is taken from the same river again — a closed loop. The Finance Secretary put the economic loss from "ghost flood-control projects" from 2023–2025 at ₱42.3–118.5 billion. Ironically, the exposure of this scandal has cut the DPWH budget from ₱1.1 trillion to ₱529.6 billion, and government construction fell −32.4% in Q2 2026 (PSA), dragging down demand for cement and aggregates.

7. Geopolitics — demand, capital, and blockage all come from outside

7-1. China — a shifting pattern of dependence

注 PNIA has noted (June 2026) that tensions in the West Philippine Sea are affecting Chinese firms' long-term investment decisions. Companies such as Tsingshan and Lygend are said to have shifted their interest to Madagascar, New Caledonia, and Tanzania. The political impact of Chinese capital entering a core building-materials industry is a key thing to watch going forward.

7-2. The United States — a framework has been built, but not a procurement contract

On February 4, 2026, in Washington D.C., a US-Philippines critical minerals and rare earths MOU was signed (one of 11 countries signing simultaneously). Pax Silica (a grouping of the US, Australia, Israel, Japan, South Korea, Singapore, and the UK) was launched in December 2025, with the Philippines signing its declaration on April 17, 2026. On April 16, a 4,000-acre Economic Security Zone concept for New Clark City, within the Luzon Economic Corridor, was unveiled.

注 The MOU is not a legally binding procurement contract. Its contents amount to a "framework" — investment promotion, technology transfer, and workforce development. There is criticism too: economist Cielo Magno argues that "with mining taxes and royalties still at the lowest end regionally, we have no bargaining leverage," while the scientist group AGHAM says "there is no guarantee of technology transfer."

7-3. Japan — intermediate products, not ore

注 Japan's involvement is not that of an "ore buyer." Philippine nickel-ore exports to Japan in 2025 amounted to just 130,000 tonnes / $4.86 million — an order of magnitude below China's 39.5 million tonnes and Indonesia's 15.45 million tonnes. In substance, this is about intermediate products. Sumitomo Metal Mining's two HPAL plants (Coral Bay and Taganito) produce mixed nickel-cobalt sulfide and scandium, which are turned into finished products at Sumitomo's Niihama and Harima plants in Japan. Mitsui & Co. holds a 15% stake in THPAL. Copper and gold flow through an arrangement in which Pan Pacific Copper takes copper-gold concentrate from Philex's Padcal mine and processes it at Saganoseki (注terms as of 2004 — current terms are unconfirmed).

注 Scandium is often cited as a "success story of moving downstream," but final refining still happens in Japan (Harima). EO 122's goal of "adding value domestically" has, in this case, only been achieved by half. Also, since March 2025, Japanese and Philippine NGOs have kept up an international petition demanding a halt to operations at Sumitomo Metal Mining's Palawan project (64 countries, 11,315 signatures delivered to the company's Tokyo headquarters on June 5, 2026); the involvement of Japanese firms is not without controversy.

7-4. The South China Sea — resources locked away by geopolitics

Recto Bank (SC 72): about 250 km west of Palawan Island, within the Philippines' EEZ. The Sampaguita structure has contingent resources of about 2.6 Tcf (Gas In Place / 注a 2012 evaluation, not recoverable reserves).

What is holding up Recto Bank is not technology or economics. It is diplomacy and national security. Forum Energy has said it stands ready to drill if naval escort is guaranteed — a guarantee the government has not been able to provide.

注 The 2026 reheating of talks is "a rise in political momentum driven by an energy crisis," not the resolution of the legal obstacles. Three walls remain unmoved: the Constitution (full state control over natural resources), the 2023 Supreme Court ruling, and the 2016 arbitral award.

And ironically, the cost of this deadlock was cashed in during 2026. The Middle East war of February 28, 2026 militarized the Strait of Hormuz (the Philippines sources 95–98% of its crude oil imports from the Middle East), and on March 24 President Marcos issued Executive Order No. 110, declaring a "national energy emergency." Diesel exceeded ₱130/L, and rotating blackouts affecting about 2 million people occurred in May. "Domestic gas at ₱4.80/kWh vs. imported LNG at ₱10.30/kWh" (Prime Energy, 2026) has become an extremely powerful political comparison.

8. Does the "resource curse" apply? — sorting it out piece by piece

If this term is going to be used at all, one must separate the parts that fit from the parts that don't.

8-1. 注 Parts that do not fit

8-2. Parts that do fit

8-3. So what should it be called instead?

This assessment's proposal: the Philippines' condition is better described not as "the resource curse" but as "suspended resources."

The resources are not mined, but neither are they abandoned. Tenements are held, reserve figures continue to be reported, and investment pledges keep being made. Yet exploration budgets sit at a tenth of their peak, and large projects are pushed back decade after decade. Tampakan was discovered in 1990, and as of 2026 it has not produced a single tonne. It is not cursed. It is stalled.

注 And whether this is a good thing or a bad thing depends entirely on who you ask.

Whether "being stalled" should be seen as a loss, or as a loss avoided — this disagreement has run for 30 years without resolution. That, in itself, may be the most accurate description of Philippine mineral policy.

9. So what would actually change things?

注 No easy prescriptions here. What follows are pairs of "conditions" and "the obstacles to them."

9-1. Condition ① Electricity — the biggest physical constraint

HPAL, copper smelting, and electric-arc furnaces all require enormous amounts of power. No smelter gets built in a country with electricity prices more than double its neighbors'. This is the core of PNIA's objection, and the hardest part of the industry's argument to refute.

注 The obstacles run deep. ①Coal power supplies about 60–63% of generation, but new coal plants are under moratorium (though a 2025 October directive carved out an exception for captive power generation for critical-mineral mining and smelting). ②The Malampaya gas field is depleting; even Phase 4 (MAE-1's original 98 Bcf in place, with Camago-3 about 2.5 times that) "only extends its life by about 6 years." ③Imported LNG costs more than double domestic gas. ④Geothermal is 3rd in the world (2,034 MW at end-2025 / ThinkGeoEnergy), but was overtaken by Indonesia in 2018, and its share of the power mix has roughly halved from about 17% in 2005 to about 8% today.

The one bright spot: starting Q1 2026, the ADB-funded Geothermal Exploration De-risking Fund (PGRDF, about ₱10.7 billion / $170 million) has become operational. It covers over 50% of drilling costs through a conditional-repayment model — "loan if successful, grant if not." This is the first time the Philippines has adopted a design where the government itself absorbs exploration risk, and whether that same design gets carried over into metallic mineral exploration is worth watching.

9-2. Condition ② Institutional stability — meaningless unless it's "law"

EO 122 is a presidential order, not a law. 注 There is a presidential election in 2028. Investors remember that, over the past 30 years, policy has reversed with every change of administration.

What is needed is assurance that "this won't change under the next administration." Concretely: ①legislating the content of EO 122; ②publishing and executing MICC's (jointly chaired by DENR and DOF) work plan (due within 90 days of signing — around November 19, 2026); ③publishing RA 12253's first-year collection results (applicable from February 17, 2026).

注 Obstacles: ①RA 12253's ring-fencing (project-by-project taxation) blocks the traditional financing model of using an operating mine's profits to fund new development — a headwind for large new projects. ②Details on reconciling the FTAA's additional government share (AGS) with the new royalty and windfall-profits tax overlap remain pending a BIR circular (as of August 2026). ③100% foreign ownership is only available through an FTAA in the first place, which requires the president's own signature.

9-3. Condition ③ Social acceptance — this is the real battleground

Shortening central-government permitting to 6 months does not buy local and indigenous consent.

What's needed: ①redesigning FPIC as "an entry point to co-governance" rather than "a hurdle to clear"; ②making the benefits of revenue-sharing tangible at the local level (RA 12253 mandates that 40% of collections be transferred directly to LGUs — 注whether this actually reaches them has not been verified); ③and above all, an environment in which those who oppose mining are not killed.

Two encouraging facts are worth noting. - On July 30, 2026, in Mankayan (Benguet), Lepanto and indigenous groups signed a 25-year MOA and obtained FPIC. The community receives a monthly royalty equal to 1% of gross production plus a one-time payment of ₱110 million. A project stalled for 30 years moved once the terms of payment were made explicit. - Benguet Corporation's Acupan contract mining arrangement (since 2002): the country's first framework in which a large operator partners with a cooperative of small-scale miners. An important case study for the institutionalization of ASGM.

注 Obstacles: ①allegations of manipulation and corruption in NCIP's FPIC process continue to surface in various places (Palawan, Sibuyan Island, Benguet). ②disputes over "who counts as indigenous to this land" (in Didipio, the proof of ancestral domain did not match the group actually living there). ③the Church is calling for the repeal of the 1995 Mining Act, structurally leaving little room for compromise.

9-4. A realistic form for moving downstream

注 A concept of building a full-scale smelter in one leap does not work unless electricity is solved first. There are three more realistic paths.

1. Deepening byproduct recovery. THPAL began the Philippines' first commercial scandium production in 2019 and chromite in 2021. This is at the heart of a realistic "critical minerals" strategy for the Philippines. The additional investment is small, and existing infrastructure can be used.
2. Choosing hydrometallurgy. Silangan will produce copper cathode and gold doré, not copper concentrate (the country's first copper-leaching operation). It is less power-intensive than pyrometallurgical smelting. 注However, as of August 24, 2026, no official announcement of first metal pour could be confirmed.
3. Recovery from tailings. In HPAL's neutralization process, most of the scandium precipitates out along with iron and aluminum. Existing nickel residue is itself a scandium resource, and is being studied as a subject of "technospheric mining."

注 And the most sobering fact of all: if Coral Bay HPAL closes around 2028 as expected, the Philippines will lose more than a third of its nickel downstream processing capacity. The Board of Investments (BOI) sounded out potential buyers for the facility at a March 2026 investment forum with Canada, but no taker has been found. Before talking about building new capacity, the country cannot even maintain what it already has.

9-5. 注 The view that things are more likely to stay the same

In fairness, the pessimistic case deserves equal weight.

• Global exploration budgets have fallen for three straight years ($12.4 billion in 2025 / S&P Global). Nickel and lithium exploration budgets have shrunk sharply amid weak prices, a headwind for nickel-heavy Philippines.
• Grassroots exploration has fallen to an all-time-low global share (21%), while exploration around existing mines has hit an all-time high (45%). Global capital for "finding new deposits in new countries" is drying up.
• The Philippines' flagship gold mines all have a visible end date (Masbate's mining life ends 2028, Padcal 2028, Runruno end of 2026, Coral Bay around 2028).
• Mining companies' record profits in 2025–2026 have come from gold prices and peso weakness, not higher output. Volumes are down across almost every company (Q1 2026 gold: volume −24.7%, value +31.2% / MGB). If prices collapse, investment plans stop all at once.

10. Conclusions

1. The premise of being "richly endowed with resources" is half myth. The genuine parts are nickel (2nd in the world), cobalt, and a handful of undeveloped copper-gold deposits. "2nd-largest gold reserves in the world," "5th most mineralized country" — neither traces to a primary source. If the question is to be reframed, it should be: "why does a country that ranks 2nd in the world for nickel remain merely a seller of ore?"

2. The other half is real, but the Philippines has not moved downstream. The reason it captures only 0.5% of GDP while accounting for 8.75% of exports is that it sells concentrate and ore and buys back refined metal. And what happened in 2025–2026 was regression, not progress (PASAR's shutdown, the deleted export-ban clause, Coral Bay HPAL's expected closure). Over the same period in which Indonesia grew its processed-nickel exports more than 20-fold in a decade, the Philippines remained a country selling $1.47 billion worth of raw ore.

3. Four gates are what's holding this back. ①The highest electricity prices in Southeast Asia (₱12.43/kWh, June 2026) make smelters physically unviable; ②a regime that reverses with every administration (1995→2012→2017→2021→2025→2026) has cut exploration budgets to a tenth of their peak; ③a layered veto — even after national approval, localities, indigenous peoples, and the Church can block a project — has kept Tampakan stalled for 30 years; ④geopolitics in the South China Sea has locked away Recto Bank.

4. And the "resource curse" applies only by half. The Philippines is not a resource-dependent economy. It is a country of remittances (7.3% of GDP) and IT-BPM (over 8% of GDP), and a collapse in mining would shake neither national finances nor the exchange rate. 注 What does apply is at the local level. When PASAR alone shut down, Eastern Visayas' growth rate fell from 6.2% to 1.0%, and its unemployment rate jumped from 2.4% to 7.7%. The curse, if there is one, falls not on the nation but on the province.

5. So the country's underground resources are not "cursed" — they are "suspended." Not mined, but not abandoned either. Whether to see this state of suspension as a loss, or as a loss avoided — the fact that this argument has gone unresolved for 30 years is, itself, the most accurate description of the Philippines' underground resources.

11. 注 Points on which this assessment avoided a definitive claim, and matters left unconfirmed

[Materials referenced from this folder] Mining and Nickel / Gold Reserves and Deposits / Major Gold Mines and Production / Small-Scale Gold Mining and the Mercury Problem / Gold Institutions, Taxation, and BSP / Gold, Investment, and Japanese Companies / Copper and Other Metal Resources / Rare Earths and Strategic Minerals / Coal and Energy Minerals / Oil, Natural Gas, and Seabed Resources / Geothermal and Underground Renewable Resources / Non-Metallic Minerals and Aggregates (12 documents in total)

[Supplementary research] PSA (International Merchandise Trade Statistics 2025, Labor Force Survey, National Accounts) / BSP (Overseas Remittances 2025) / IBPAP (IT-BPM 2025) / DOE (Electricity Rates, June 2026) / S&P Global (World Exploration Trends) / Fraser Institute (Annual Survey of Mining Companies 2025) / PH-EITI / Global Witness (Roots of Resistance) / MiningWatch Canada, Inquirer (Marcopper settlement) / Mineral Economics, AfDB (Indonesia's downstream shift)

日本語の詳細版: 分野「経済・産業・ビジネス」「_地下資源の総合考察」（本サイト日本語版）。