The Impact of Mining Presence on Municipality Human Capital Investment in Mindanao
Date
2017-12
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Abstract
The environmental and economic impacts of the Philippine mining industry have been a
sensitive topic. Its purported negative effect on the environment has pushed a number of interest
groups to fight for the forfeiture of the biggest mining companies’ permits in the country.
Nevertheless, studies show that responsible mining firms, which comply with the government’s
rules and regulations, not only generate greater economic activity and development, and thus,
employment, in their respected mining areas, but also provide other local benefits in terms of
environmental rehabilitation after the mining process and additional local government revenues
through licensing fees, business taxes, social development and management programs (SDMP),
mineral production sharing agreements (MPSA) and others. Accordingly, this study employs
Blundell and Bond’s (1998) System GMM (SGMM) technique on a panel of 427 municipalities
in Mindanao during the period 2009-2015 to analyze the effect of the presence of responsible
mining firms on human capital investments in health and education of municipal governments in
Mindanao. Results show that mining presence indeed has a positive impact on municipal
government expenditures on human capital investment. Moreover, the type of mineral mined
also has varying effects on the said expenditures.
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Keywords
mining presence, local government, human capital, public spending