Gold mining in the Philippines is a major contributor to economic development and it occurs in two main forms: large-scale, and artisanal and small-scale gold mining (ASGM). In 2018, the Philippines generated 36.8 metric tons of gold, worth about US $1.5 billion at world prices. According to the Central Bank of the Philippines (Bangko Sentral ng Pilipinas - BSP), small-scale gold miners generated just under US $14 million worth of gold, or about 350 kg in the same year. The real figure is certainly much higher. It was just under US $73 million in 2011 when the BSP had effective gold buying houses operating.
Though there was a drop in the ASGM gold buying by the BSP after 2011 due to a 7% tax imposed on all gold purchases, there is no reason to expect that ASGM production is lower today. Many small-scale miners are operating without permits and their mining practices are not covered by government regulations. In addition, a drop in gold production reflects the reduced gold purchases by the government due to unfavorable rates to miners compared to the informal buyers. Hence, the volume of gold produced is underreported.
ASGM is the oldest form of mineral extraction and processing in the country. There were no large-scale mining operations in the Philippines until 1921, but ASGM was practiced hundreds of years ago in rural areas and was ultimately formally recognized through the enactment of Presidential Decree 1899. However, today the ASGM sector remains largely informal, with complicated ownership structures, data gaps on financial flows, and unclear process of collection and use of taxes generated from the industry. Therefore, it remains unclear how an average Filipino benefits from these mineral resources. Ensuring equitable distribution of mining benefits among communities is in the national interest but the concept is still in its infancy, perhaps due to the absence of robust information on the use of funds for the whole gold industry (an audit process)1.
ASGM is practiced in more than thirty provinces across the country and employs around 300,000 - 500,000 miners2. On average if a miner produces gold worth US $5/day, a community of 400,000 miners will generate US $400 million, working 200 days per year. Therefore, the sector acts as a main source of income for rural communities and has been a catalyst for social and economic progress where it operates, such as the small town of Buenavista, Quezon, a six-hour ride from Manila and home to around 30,000 citizens.
In 2004, a 332-hectare piece of land was declared as a People’s Small-Scale Mining Area or Minahang Bayan, covering Barangays Bulo and San Vicente. To date, two small-scale mining cooperatives, La Suerte Small-Scale Mining Cooperative and Grande Multipurpose Cooperative, have been operating with small-scale mining contracts (SSMCs) within the area. Interviews and reports show that these formally established cooperatives have provided significant employment, valuable rural infrastructure development projects, and social interventions to the local population. Social interventions include scholarships, hospitalization assistance, disaster resilience programs, and donations in collaboration with the Barangay Local Government Units.
Sustainable ASGM provides opportunities and valuable employment to rural local populations
Based on key informant interviews with the ASGM leaders, a total of 404 miners are currently operating in Buenavista Minahang Bayan. However, discussions with the mayor revealed that 10% of the 30,000 population, or around 3,000 people in the municipality, rely on ASGM for their livelihood. Most of whom are locals with a few migrant miners coming from nearby provinces.
The majority of the formal ASGM operations of La Suerte and Grande, as well as those informal ASGM associations working inside the Minahang Bayan, employ profit-sharing agreements. There is a financier/owner and miners. The general agreement is that the production costs including food, materials, and supplies will be deducted from the income generated from the sale of gold, and then the remaining profits are divided among the financiers and miners with 40% going to the financier and 60% to the miners.
From the income generated based on this profit-sharing scheme, miners of the Grande Multipurpose Cooperative were reportedly able to afford college education for their children, make improvements to their houses, and buy some agricultural lands. ASGM also became their only source of income after their farmlands and fishing grounds were heavily damaged by Super Typhoon Haiyan in November 2013. This supports claims that ASGM is part of the mix of income sources that help communities build resilience into their agricultural economies.
With recent developments due to the ongoing COVID-19 outbreaks in the country, the Philippine government has initiated a socioeconomic program called “Balik Probinsya, Bagong Pag-asa”, which translates to “Return to the Province, New Hope”. This program seeks to decongest urban areas by encouraging people to return to their home provinces; it offers assistance with this transition. However, despite the good intentions of the program, a remaining challenge is to address the availability and sustainability of income opportunities in the countryside.
It is therefore timely to examine the characteristics of rural livelihoods, especially of the ASGM sector. Supporting the sector towards becoming a sustainable source of livelihood will provide better opportunities for future generations to provide for themselves without undermining the environment. The system in place for miners in Buenavista is an example of how support can work. They receive training on safety, health, and environmental protection and enhancement, and in return are expected to comply with rules and regulations including the use of personal protective equipment, proper tailings management, and rehabilitation of abandoned tunnels to avoid accidents, among others3.
Sustainable ASGM contributes to infrastructure development in rural communities
ASGM cooperatives have managed to contribute to the development of Buenavista through land donations and construction of roads, pathways, and buildings for public use. Grande has donated for the construction of the Barangay Health Center, Barangay Day Care Center, and a church located in Barangay Bulo. These facilities provide improved access to health, childcare, and other services in Barangay, not only for the miners in the Minahang Bayan but for other residents in the area as well.
Additionally, La Suerte has also donated around 1.7 hectares of land for the use of Buenavista National High School and its annex campus. A building for the Technical Education and Skills Development Authority, which is a government agency providing essential short courses and certification programs, was also established on the land provided for the annex campus.
Improvements in rural infrastructure provide the communities with access to basic rights and services such as education, and welfare. These improvements are expected to lay the foundation for better economic opportunities and assist in reducing inequalities. Other mining associations in the area are applying for legal titles and permits, and if these operations are formalized, they may also provide the same types of support that Grande and La Suerte have given to the community amplifying the positive social impact of ASGM and highlighting the need to accelerate formalization of the sector.
Sustainable ASGM creates community development programs and supports social interventions
As of 2016, Grande financially supports 52 scholars and has already supported 64 college graduates, 136 high school graduates, and 86 elementary school graduates3. These scholarship programs provide access to education and ultimately better economic opportunities increasing the chance of breaking the cycle of generational poverty. Some of the scholars who have graduated are now leading and supporting the improvement of the ASGM sector in Grande, creating a virtuous circle of improvement.
Moreover, Buenavista’s Community-Led Total Sanitation (CLTS) program was cited as a model of success by the country’s Department of Health. The program led to increased ownership and use of toilets which improved occupants’ health and safety. In an interview, Buenavista mayor Medy Uri-Rivera shared that this became possible through La Suerte’s donation of 3-hectares of land which was used as a relocation site for communities that needed to upgrade their toilet facilities but have land tenure problems that had been preventing them from committing. This became a collective solution for improved sanitation and personal hygiene of the community.
The members of La Suerte and Grande are also being provided hospitalization assistance during emergencies and can request cash advances from the tunnel owners or financiers. Cash advances have been especially helpful during the COVID-19 pandemic when mining operations stopped due to lack of access to markets, buyers, processing supplies, and workforce.
For these communities ASGM is an indispensable economic and social support system. But further technical and financial support is needed from the government, financial institutions, and other relevant stakeholders. This will ensure that the system can continue to provide important support to communities while also steering it onto an environmentally sustainable pathway. Efforts to eliminate the sector rather than formalize it will most likely push marginalized populations involved in the sector further into illicit trades. The existing Minahang Bayan in Buenavista, Quezon has a long way to go in terms of safety, environmental protection, and enhancement measures and in fact, several associations operating in the Minahang Bayan are still informal or are still in the process of applying for SSMCs. However, the improving systems and progress of the ASGM operations in Buenavista strongly illustrate that when formalized, the sector can be highly productive, create significant opportunities, develop infrastructure, and commit to valuable social interventions that uplift members of the communities it serves.
The planetGOLD Philippines Project and the Minamata Convention on Mercury
The Global Environment Facility-funded planetGOLD project, executed by the Artisanal Gold Council and co-implemented by the UN Environment Programme and UN Industrial Development Organization in the Philippines, is working towards eliminating mercury use in the ASGM sector, which is a common practice in ASGM in the Philippines. Mercury from ASGM globally is in fact the world’s largest source of mercury pollution. planetGOLD is an innovative programme that aims to improve the lives of artisanal and small-scale gold miners by reducing the financial gap, supporting formalization, raising awareness, and connecting miners to mercury-free technology and formal markets. The project envisions a path to a responsible, cleaner, and more efficient artisanal gold mining sector.
On July 8, 2020, the Philippines ratified the Minamata Convention on Mercury, a global treaty to protect human health and the environment from the adverse effects of mercury. Meanwhile in the same month the price of gold surpassed its previous all-time high of nearly US $2,000 an ounce, the highest since September of 2011. This is therefore an ideal time for policymakers, stakeholders, financial institutions, and miners themselves to come together to transform the ASGM sector to achieve its vast potential for delivering sustainable livelihoods to rural communities.