The Philippine metallic mineral industry of the early 1990s can be described as moribund, characterized by closure of a large number of major mines, as well as downsizing and losses for those that remain in operation. The mining investment climate is perceived to be so negative by foreign investors, so that it is avoided and ranked even lower than socialist Vietnam and China.

Cumulative effects of adverse government policies and actions since the middle 1970s, coupled with the energy and debt crises and the consequent economic and social problems within an uncertain social and political milieu brought about the negative mining investment environment. Some of the major problems identifed before 1986 are unpredictable government policies, almost arbitrary taxation, unfair application of laws and policies to the acquisition of mineral rights, lack of incentives and appropriate mechanism to encourage foreign investments and unsettled peace and order situations. After 1986 most of the preceding problems still persist but the most important problem was the lack of a mining law that can be used as basis for implementing the provisions of the 1986 constitution.