Transcript Context of small scale gold mining Small scale gold mining as a non

REVISIONS ON THE DIRECT
MEASUREMENT METHODOLOGY USED
FOR NON-OBSERVED ECONOMY:
A CASE FOR SMALL-SCALE GOLD
MINING
By
Dean Joseph A. Villanueva and Reynaldo F. Fulleros
Presented by
Dean Joseph A. Villanueva
Macroeconomic Accounts Service
Philippine Statistics Authority
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
OUTLINE OF THE PRESENTATION
I.
Introduction
II. Current estimation procedure of the small scale
gold mining
III. Proposed estimation methodology
IV. Findings, conclusions, and recommendations
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
I. Introduction: Context of small scale gold mining
SMALL SCALE PURCHASES OF BSP
7,000,000,000
4,000
6,000,000,000
3,500
3,000
5,000,000,000
2,500
4,000,000,000
2,000
3,000,000,000
1,500
2,000,000,000
1,000
1,000,000,000
500
-
(2,000,000,000)
2015M5
2015M3
2015M1
2014M11
2014M9
2014M7
2014M5
2014M3
2014M1
2013M9
2013M11
2013M7
2013M5
2013M3
2013M1
2012M9
2012M11
2012M7
2012M5
2012M3
2012M1
2011M11
2011M9
2011M7
2011M5
2011M3
2011M1
2010M9
2010M11
2010M7
2010M5
2010M3
2010M1
2009M11
2009M9
2009M7
2009M5
2009M3
2009M1
(1,000,000,000)
(500)
(1,000)
Production Volume
Production Value
Source: Mines and Geosciences Bureau
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
Linear (Production Volume)
Linear (Production Value)
I. Introduction: Context of small scale gold mining
Small scale gold mining as a non-observed economy
• There are specific approaches in quantifying the production of
the non-observed economy.
• Eurostat’s Tabular Approach to Exhaustiveness:
N1
N2
Producer should
have registered
(underground
producer)

Illegal producer
that fails to
register



The producer does not register in order to evade
taxes and social security obligations.
Type N1 excludes producers that fail to register on
the basis of activities illegal in nature
Type N2 includes activites that avoid registration
completely
N2 excludes illegal activties by registered legal
entities that report (or misreport) their activities under
legal activity codes.
Source: Eurostat
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
II. Current estimation procedures
Formula:
SSM Production = BSPgold purchases + Undercoverage
“Resulting estimates are used to extrapolate quarterly
and yearly outputs based from a benchmark.”
Limitations:
 Under coverage mining uses a fixed ratio
 This fails to capture behavior of production during
structural changes in the industry
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
III. Proposed estimation procedures: Methods in
estimating the non-observed economy
Method
Labor
Input
Method
SupplyUse
Method
Description
Data Availability
Data Limitation
• Derives labor input
• Labor Force
estimates through weight
Survey
factors to obtain estimated
total output and gross
value added
• Census of
Population
Data
• Only captures
labor of the
metallic mining
industry
•
• Structural
changes may
not be captured
by the ratios
provided by the
accounts
This is contingent on
supply of inputs data that
are used in producing
goods and services.
• Input-Output
Accounts
• Census does
not cover details
covering gold
mining industry
Source: Organisation for Economic Co-operation and Development; Philippine Statistics Authority
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
III. Proposed estimation procedures: Alternative data
and source
Agency
Permit/Clearance
Remarks
Provincial
LGU
Small Scale Mining Permit Per contract, renewable
every 2 years
Delivery Receipt
Ore Transport Permit
Application
OTP Renewal (every 15
days)
Barangay
LGU
Barangay Clearance
Annual
Transport Fee
Per day
Source: Environmental Management Bureau and Provincial LGU of South Cotabato
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
III. Proposed estimation procedures: Labor input
method
Step 1: Derive the basic indicators:
• Total Production
• Labor Productivity
• Specific Gravity
• Recovery Rate
Step 2: Estimate for the total level of production
• Ore mining
• Gold panning
Step 3: Compute for the total production of the identified area/mining site
• By identified provinces
• By identified regions
Step 4: Use the growth rate of the employment level in extrapolating the
total level of production (by mine site, by identified province, by region)
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
IV. Findings, Conclusions And Recommendations:
Findings and conclusions
1. The devolution of power vested by the Local
Government Code (LGC) to the LGUs significantly
affected the capacity of the national government
(through the MGB) to monitor activities of SSM.
2. The CPH and LFS are potential sources of data on
Labor, however, the classification level is still highly
aggregated.
3. Small scale mining industry is not entirely
homogenous in terms of labor inputs, capital and
technology, among others.
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
IV. Findings, Conclusions And Recommendations:
Recommendations
1. Develop a well defined coordination system among
government agencies from both national and LGUs,
that will perform the following major tasks:
a) Overall monitoring, data collection and processing of
administrative based information.
b) Conduct of benchmarking, surveys and other forms of
data collection when necessary.
c) Regular evidence gathering of illegal activities in
small scale mining.
d) Validation of reports and information.
This inter agency cooperation should be bonded by
formal agreements, administrative orders or a
Presidential decree, if necessary.
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City
IV. Findings, Conclusions And Recommendations:
Recommendations
2. Push for the establishment of “Minahang Bayan” which
operations are directly monitored the MGB and jointly
with the LGU (following LGC).
3. OTPs issued by the MGB for the first issuance and
LGUs for the succeeding periods must be processed
for quarterly estimation, meantime proposed systems
are still not in place.
4. Generation of the parameters suggested in the
proposed benchmarking and surveys, can be included
as requirements in the issuance of OTP, as another
alternative.
5. There is the need to regularize the conduct of
benchmarking to monitor and reflect effects of
structural changes in the market.
13th National Convention on Statistics
October 3-4, 2016, EDSA Shangri-La Hotel, Mandaluyong City