'The refusal of the President to allow new mines to operate should force him to declare that in his watch no mining project will be allowed to operate.'

By anybody's admission the economy is growing on consumption demand. It is bound to be that way for some reasons. First, there is plenty of remittances by overseas workers. The funds are mostly used for consumption.

Second, money is so cheap consumers may even borrow at the lowest rate for consumption and investment-not necessarily in that order. The Bangko Sentral reported that consumption loans increased by 15 percent.

That should be the best indication that economic growth is indeed consumption-led. Which is not bad because producers are able to move their goods. They expand their operations to produce more. It is only in that way that few jobs are created by consumption-led growth.

The longer-lasting and sustained way to faster growth is investment. That is what we sorely lack although the property sector and the service industry continue to spend money to expand operations.

After all these apartments are built and sold, the people who built them lose their jobs. They do not know where to go next.

This may not be so in the case of tourism as part of the service industry, but tourism is highly seasonal and depends on so many things such as peace and order. Foreign countries including the United States and some in Europe almost regularly issue travel advisories asking their citizens to avoid the Philippines when they travel.

While it is more desirable to see the economy growing by the flow of investments, such flow depends on so many factors. One is the permanence of policy which is variously interpreted as leveling the playing field.

Another is investment climate which no incentives can create. Climate is created by the leadership, not by any law.

While the Philippines is described in nearly all parts of the world including developed economies as one of the fast emerging markets of the world, the economy does not get that much of foreign direct investments.

The little that we get is portfolio money which is used exclusively to buy equities, notably shares of stocks listed in the Philippine Stock Exchange. As tirelessly mentioned, portfolio or hot money is a curse, not a boon to the economy.

To begin with, it does not stay in the country that long. Therefore, it cannot create jobs. The most that the economy gets is the value of transaction tax which is only one-fourth of one per cent. When portfolio money comes in, the gross international reserves go up. When it flies out many times in less than a year, the reserves are reduced much more because the hot money is liquidated for a profit.

It is not easy to say that President Aquino himself is practically sabotaging his own campaign to attract direct foreign investment.

We have Sagittarius Mines ready with $5.9 billion to invest in the development of Tampakan gold-cooper deposits in South Cotabato.

More than three long years have come and gone but the company has not been granted a permit to operate. The reason is stupid. The President seems to have succumbed to the resolution of the provincial board of South Cotabato banning open pit mining.

The continued denial of a permit to the company which is reputed to be the largest mining operation in Southeast Asia (if it is allowed to operate) is self-embarrassing to the President because he has declared that the national law on mining is superior to any resolution to the contrary by any local government unit.

At the rate the President is dealing-or not dealing at all-with Sagittarius Mines, he might as well declare that his administration hates mining because, as some foreign-funded non-government organizations (NGO) claim, open pit system and mining for that matter, harm the environment.

Mining in the rest of the countries of the world-market-driven or centrally-planned-are in frenetic efforts to extract the ores from the bowels of the earth to hasten economic development.

In the Philippines, the leadership is doing the opposite. Even more strange, in fact completely shameful, is the fact that it is easier for illegal mining to get a permit. We all know how the small-mining law has been violated.

The law says that the small man mining the ore must use pick and shovel, as if to lend more meaning to the word "small-scale." Their production is limited to 50 tons of ore a year.

What is really happening? The small mining operators, using heavy equipment, produce a whole lot more than what the law allows.

Small mining is not small. It has been made commercial by unscrupulous people who take over the supposedly small operation. The government knows it. But it chooses to close its eyes to the anomaly, probably because it is scared that the small mining people will protest saying that the government deprives them of what the state gave them by law.

We cannot attract direct foreign investment by rejecting a big mining investor that is already and has been waiting for longer than three years.

There is an absolute necessity to put the mining issue on ice. The refusal of the President to allow new mines to operate should force him to declare that in his watch no mining project will be allowed to operate.

Such a declaration will resolve the controversy once and for all. The investors of Sagittarius and the nickel operation in the two Mindoros can pack up and go home. That is better than keeping them hoping but there is nothing in the air that remotely suggests their hopes will materialize.

Nothing beats being honest. Nothing is worse than indecision.

By AMADO P. MACASAET

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