Experts in the financial industry say that the Philippine mining sector will have a difficult time securing funding for projects in 2009, given tight conditions presented by the global financial crisis.

"I think the financial market situation is still such that funding for mining projects will remain scarce and therefore it will be requiring all sorts of efforts from companies to find many different funding sources as possible," said Karlsten Fuelster, senior investment officer of International Finance Corp. (IFC) Southeast Asia.

The tightness in credit would reportedly be felt particularly by smaller mining companies versus those that are already listed at the Philippine bourse. Given the global environment, Fuelster said, companies will have to double their efforts in packaging their projects to invite investors to participate.

"The IFC is open for business, but we will be very selective this year," Fuelster says.

Henry Antonio, partner for Business and Financial Advisory Services of KPMG meantime said he believes mining companies will have to look to alternative sources of funding this year such as structured loans as opposed to getting direct investments, particularly from overseas.

"There are still available funding locally and regionally here in Asia. But a lot of it will be focused on quality assets. Loan syndication is a good alternative, and it will expand the funding sources of a mining company, but it's a bit more costlier as it's more creditor-friendly."

Because of the difficulties to be faced this year, Benjamin Philip Romualdez, president of Chamber of Mines of the Philippines said the mining industry will be delayed in its target of pulling in $10 billion in investments by 2011. But he added that since the issues are not Philippine mining issues and are international financial conditions, it may be quicker to resolve.

"We will reach the target. It's just a question of when. Right now, we're experiencing a confidence perception problem in the international community. It has nothing to do with the Philippine mining projects. The issue is the global financial markets. And given these, they will need time to sort out those issues. And as confidence comes back within the banking community, then we can see a quicker pace of projects moving forward," he says.

Romualdez stressed that the Philippines remains one of the potentially rich mining countries in the world, and is closest to one of the two sources of funding - China and Japan. "This gives us very strong competitive advantage compared to the other parts of the world."