MANILA, Philippines – Australia and New Zealand Banking Group Ltd. believes the massive audit of mining companies may adversely affect the industry’s output as well as export earnings.

Eugenia Victorino, economist at ANZ Bank, said the environmental audit of the mining industry could significantly cut production and export revenues.

“While we see limited impact on growth, the risk is that more suspensions in mining production could lead to a further deterioration in the trade deficit, resulting in a much narrower current account surplus next year,” she said.

Latest data showed the country’s exports earnings contracted by 8.3 percent to $31.5 billion from January to July this year, while imports jumped 14.4 percent to $45.47 billion.

However, Victorino said cash remittances from Filipinos abroad as well as receipts from the business process outsourcing sector would cushion the decline in export earnings.

“We expect ongoing remittances and growth in the business process outsourcing sector to provide an offset,” she added.

Environment Secretary Gina Lopez has ordered a massive audit of the operations of mining companies since her appointment as head of the Department of Environment and Natural Resources (DENR) by President Duterte.

The audit resulted in the suspension of the operations of 10 mining companies for violation of environmental standards.

The audit team has recommended the suspension of eight more companies including Filminera Resources, Marcventures Mining and Development, Agata, CTP Construction and Mining, Hinatuan Mining, Benguet, Lepanto Consolidated Mining, and OceanaGold Philippines.

DENR Undersecretary Leo Jasareno, head of the mining audit team, earlier said only 11 of the 41 operating metallic mines in the country passed the audit while 20 were ordered to explain why their operations should not be suspended.

Several mining firms that are members of the Chamber of Mines of the Philippines (COMP) already slammed the audit conducted by the DENR.

COMP vice president for policy Roldan Recidoro earlier said the premature release of audit reports has damaged the reputation of mining companies.

He pointed out the government’s premature announcement would have a serious impact not just on current mining projects but also on the new ones.

“The repercussions go well beyond our mining communities. Investments are in danger. A lot of these companies with alleged violations are publicly-listed companies, jeopardizing stocks and shareholders especially at a time that the peso is struggling,” Recidoro said.

The COMP emphasized that the DENR’s action was inconsistent with President Duterte’s thrust to honor existing contracts and support responsible mining.

Source: www.philstar.com/business