A study by the economic and consulting research firm Center for Research and Communication (CRC) found that Rio Tuba Nickel Mining Corp. (RTNMC), a subsidiary of Nickel Asia Corporation (NAC), was able to register a total national (value-added) multiplier effect of P44.2 billion between 2017 and 2021, or P8.8 billion per year, from its various economic projects.
NAC said that according to the study, which evaluated the firm’s direct, indirect, and rippling effects on the economy, NAC-RTNMC is able to add P1.47 in increased financial output for every peso it makes.
Its direct contributions come in the form of exports, employment, wages, and tax payments, while its indirect contributions come in the form of its commercial interactions with suppliers and third-party service providers.
The company is the largest producer of nickel ore in the Philippines and one of the largest in the world. Its core business activities in Palawan and several other provinces in the Philippines stand at the forefront of shared economic value creation and sustainable development.
“The core business of NAC in Palawan, which is primarily undertaken by RTNMC, engages numerous upstream and downstream economic supply chains, involves local communities, and addresses socioeconomic and environmental issues,” the company said, adding “it has woven extensive economic, social, and environmental linkages that have created ripples of economic multiplier effects and sizeable socioeconomic benefits across both national and local economies.”
The CRC Research Team, led by well-known economist Dr. Cid L. Terosa, measured the direct, indirect, and induced national and regional economic multiplier effects of NAC-RTNMC, as well as its total contribution to gross domestic product (GDP) and gross regional domestic product (GRDP) (GRDP).
The socioeconomic impact study assessed the national economic multiplier effects of NAC-RTNMC from 2017 to 2021, categorized into three: direct, indirect, and induced. Direct impact is the added value created by the company that totaled approximately Php17.9 billion and averaged Php3.58 billion annually.
Indirect Impact is value-added created by input suppliers of NAC-RTNMC and their chain of suppliers which amounted to about Php16.3 billion, or Php3.26 billion per year. Meanwhile, induced Impact is the additional production and employment induced by the consumption of goods and services by employees of NAC-RTNMC and its entire network of input suppliers that added up to around Php10 billion and averaged Php2 billion yearly.
The total contribution of NAC-RTNMC to GDP and Gross Value-Added (GVA) of Mining and Quarrying from 2017 to 2021, NAC-RTNMC contributed an average of Php9.9 billion to GDP which was approximately 0.1% of the average GDP during the period. The contribution of NAC-RTNMC to GDP grew at a compound annual rate of approximately 11% from 2017 to 2021. Relative to the total and average GVA of Mining and Quarrying from 2017 to 2021, the contribution of NAC-RTNMC is approximately 6.2%. The share of the total contribution of NAC-RTNMC to the GVA of Mining and Quarrying increased from 3.9% in 2019 to 7.8% in 2021.
The total household income multiplier effect of NAC-RTNMC from 2017 to 2021 was also analyzed which resulted to approximately Php7.1 billion, or Php1.4 billion per year. This means that NAC-RTNMC creates 28 centavos additional household income elsewhere in the economy for each peso of added value directly created by it. Simply put, one peso of added value created by NAC-RTNMC creates an additional household income of 28 centavos in the economy.
Engaged, satisfied employees
NAC-RTNMC directly employed an average of 1,210 employees from 2017 to 2021. It created approximately 1,421 to 1,895 jobs yearly from 2017 to 2021 through its network of input providers in MIMAROPA region.
In terms of employment multiplier effects, the average number of direct, indirect, and induced employment that NAC-RTNMC created is approximately 3,903. Its average employment multiplier over the course of the period is 3.2 which translates to four (4) jobs created elsewhere for every person directly employed by NAC-RTNMC. A socioeconomic and satisfaction survey of NAC-RTNMC’s employees also showed positive results. Members of the NAC-RTNMC family are proud of what they do, the company, and its work-life balance culture.
Regional Economic Impact
Situated in the MIMAROPA region, NAC-RTNMC produced a total regional output (value-added) multiplier effect from 2017 to 2021 that ranged from Php19.9 billion to Php27.4 billion, or Php4 billion to Php5.5 billion annually. The total regional output (value-added) multiplier effect of NAC-RTNC increased over the five-year period from Php3.8 to Php5.3 billion in 2017 to about Php5.9 billion to Php8.1 billion in 2021.
NAC-RTNMC contributed Php25 to Php32.5 billion to the GDRP of MIMAROPA region, or approximately Php5 billion to Php6.5 billion per year. The average contribution of NAC-RTNMC to GRDP of MIMAROPA Region from 2017 to 2021 was about 1.4% to 1.8%. Meanwhile, NAC-RTNMC contributed an average of 15.3% to 19.9% to the GVA of Mining and Quarrying of MIMAROPA Region during the same period.
The study also highlighted the impact of NAC-RTNMC in reducing unemployment in the Province of Palawan. On the average, NAC-RTNMC has reduced the total number of unemployed persons in Palawan by 16% to 25% from 2018 to 2021.
Catalytic Impact in the Municipality of Bataraza
Apart from the national and regional economic impacts, NAC-RTNMC is creating ‘catalytic impact’ in the Municipality of Bataraza on top of its direct, indirect, and induced multiplier effects.
Social and environmental dimensions in the Municipality of Bataraza are addressed by various corporate social responsibility (CSR) and social development programs. Through its donations to the RTN Foundation, Inc. (RTNFI), NAC-RTNMC has uplifted the lives, living conditions, and well-being of thousands of households in the Municipality of Bataraza.
From 2017 to 2021, NAC-RTNMC together with Coral Bay Nickel Corporation donated at least Php716 million to support CSR programs in healthcare, education, shelter, and community-development including scholarships for its indigenous learning system (ILS) project. programs of RTNFI that help empower residents of the Municipality of Bataraza economically and socially.
NAC-RTNMC has significantly contributed to the fiscal health of the Province of Palawan and the Municipality of Bataraza. From 2017 to 2021, NAC-RTNMC contributed 82.6% to the total tax on business collected by the Municipality of Bataraza.
Meanwhile, tax on business paid by NAC-RTNMC from 2017 to 2021 was about 40.3% of the total tax on business collected by the Province of Palawan during the same period.
Also, it is noteworthy that the compound annual growth of business tax paid by NAC-RTNMC (25.5%) is faster than that of the Province of Palawan (22.2%) and almost as fast as that of the Municipality of Bataraza (26.5%). Hence, it appears that NAC-RTNMC has a sizeable impact on the fiscal performance of the Province of Palawan and the Municipality of Bataraza as far as tax on business is concerned.