The Philippines’ business environment has something of a Jekyll and Hyde complex. On one hand, Coca-Cola is planning to invest an additional $1.2-1.3 billion in the country over the next five years. In an interview published in the Manila Bulletin on Wednesday, the firm’s executive vice president, Ahmet Bozer, said, “We are not shy at seeing the opportunity in the Philippines and to invest for that opportunity. [This country] is the 12th largest in the world in terms of sales and volumes so, therefore, we will always have investment here.”
Bozer also stated that Coca-Cola has had good dealings with the government, which “has been most impressive, and most friendly to business.” (CEO Muhtar Kent recently met with President Benigno Aquino III, and each thanked the other.) Bozer noted that Coca-Cola is among the Philippines’ top five corporate employers, with 10,000 workers. And as the firm expands its Philippines operations, more jobs will be created. Bozer mentioned that there could be a requirement for a new plant in the future. “Right now we haven’t publicly spoken about any but there could be and we will certainly share that,” he said.
Coca-Cola’s president for Asia Pacific Atul Singh noted that the firm already invested $1.5 billion in the Philippines from 2010 to 2014. Boosting its distribution network created over 2,000 new jobs for Filipinos. Regarding the latest expansion, Singh added that besides increasing direct employment, “As we invest and expand our business, there is a big multiplier effect in many other industries like in packaging, people who make the bottles, crowns, the logistics, raw material… We look at sustainability for our entire value chain, not just our business.”
On the other hand, mining firm Glencore exited the Philippines on Friday by selling its controlling stake in Sagittarius Mines. Sagittarius is licensed to exploit the estimated 15 million tons of copper and 17.6 million ounces of gold contained in the vast Tampakan mine on the southern island of Mindanao. But Tampakan was a flop—not for geologic reasons, but political ones.
Opposition, based on concerns about its environmental impact, led by the Roman Catholic Church and prominent public figures was compounded by armed raids by Communist rebels. In 2010 open-pit mining was outlawed in South Cotabato province, where Tampakan is situated. Provincial governments also have attempted to ban mining because the central government is too slow to give them their share of mining revenues, according to people within the industry.
Overall, the Philippines ranks second-worst in the world in mining policy framework, according to a recent poll of global mining professionals conducted by Canada’s Fraser Institute. Of the six foreign-controlled mines in the country, only one is operational, and the others (including Tampakan) are experiencing protracted delays. Therefore much of the country’s mineral resources – worth up to $1.4 trillion by official estimates — remains untapped.
Meanwhile, mining policy is not becoming more favorable. Just the opposite, in fact, as the Philippine Congress is currently debating a law put forward by the president to levy higher mining taxes. Coupled with the slump in commodities prices, industry experts believe that the country’s mining sector has missed out on billions of dollars. Last but not least, the country’s presidential elections next May are keeping businesses guessing about their future.