Extractive Industries and the Financing of Child-Inclusive Social Development in the Philippines

This paper seeks to assess whether the revenues from the extraction of mineral resource of the country could help provide the best opportunities for children’s welfare. It examines the effectiveness of different government policies in translating the revenues from mining to social and economic programmes that may benefit children. It also describes the macroeconomic contribution of metallic mining and summarizes the existing literature on the environmental and social impacts of mining in the country.

The paper then examines the revenue and expenditure patterns of the national and local governments and how government spending relates to children’s rights and well-being. It finds, despite being one of the most resource-rich countries in the world, that the Philippines has failed to translate these resources into an engine for growth and development, particularly for children. Indeed, the current sharing scheme on the revenues from the extraction of resources between the State and the contractors is clearly disadvantageous to the government, as the current tax rates and royalties are relatively low compared to other mineral-rich countries. In turn, the spending pattern of local governments does not reflect prioritization of basic social services, intergenerational equity and prioritization of children in spending proceeds from extractive activities. Instead, the poverty incidence of children in mining provinces is higher than the national average, while children in mining regions have often become victims of environmental destruction, human rights abuses and child labour, which is primarily due to weak regulatory capacity of the government. Policy recommendations on how to address these issues are furnished in the conclusion.

At the time of writing this paper, Cielo Magno was Assistant Professor at the University of the Philippines’ School of Economics and the National Coordinator of Bantay Kita, the Publish What You Pay Coalition in the Philippines.