Assessment of the Governance Performance of the Regulatory Regime Governing Foreign Mining Investment in the Philippines

Abstract

This paper assesses the performance of the regulatory regime for foreign mining investment in the Philippines. Based on this, it outlines policy recommendations for the Philippine government, which, if implemented, are likely to improve the governance infrastructure in the sector and, in turn, reduce regulatory risk for foreign mining investors and attract more foreign investment. The main argument is that the poor performance of the governance structures in the Philippine mining sector is behind the high level of regulatory risk for foreign mining investment, and the low levels of foreign investment. After outlining the relevant theoretical frameworks essential for the assessment of the performance of the regime, the article maps the regulatory regime governing foreign mining investment in the Philippines by summarizing the major rules and regulations, institutions (rule‐makers and regulators) and stakeholders in the Philippine mining industry. This is followed by the assessment of the performance of the regulatory regime for foreign mining investment. Finally, policy recommendations for improving governance infrastructure in the sector are outlined. This paper, unique in its subject area, may assist the Philippine government and possibly governments of other developing countries in improving governance infrastructure in their mining sectors and, thus, reduce the level of regulatory risk and increase the amount of foreign investment in the sector.

Acknowledgements

The author would like to thank Dr Terry O'Callaghan for feedback on previous drafts.

Notes

1. Incongruity rather than gap is a better word to describe the divergence between formal procedures and the actual performance of a regime. For instance, a regulatory regime may: (a) not be acting in accordance to certain formal procedures (no B and D below); (b) be acting in accordance to other formal procedures (A, C, E, F below); and (c) be acting in a way that is not prescribed by formal procedures (G and H below).

How they are supposed to act: ABCDEF

This is how they act:     A_C_EFGH