The Bangko Sentral ng Pilipinas (BSP) on Tuesday brushed aside concerns over having sold a good part of its gold holdings, saying their disposition forms part of a well-established reserve management strategy.
This pertains to a published report claiming the BSP disposed of 25 tons of the precious metal in the first six months of the year, a report that scandalized ordinary citizens and some in the financial industry who asked the monetary authorities to explain the transaction.
The World Gold Council reported a sharp drop in gold reserves of only 145.72 tons in the first three months this year versus 159.05 tons just a quarter earlier. But a local publication reported the BSP sold the most of its gold holdings compared to peers, totaling almost 25 tons that allegedly diminished the country’s gold reserves by more than 15 percent to 134.06 tons.
BSP governor Eli Remolona issued a statement saying the gold sale forms part of an active management strategy of the country’s gold reserves forming part of the country’s gross international reserves (GIR).
“The BSP took advantage of the higher prices of gold in the market and generated additional income without compromising the primary objectives for holding gold, which are insurance and safety.
“Amid the gold sales, the country’s GIR has remained robust, with the end-August 2024 figure rising to USD107.9 billion from USD103.8 billion as of end-December 2023.
“The GIR level provides an adequate external liquidity buffer and is equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income,” Remolona said.
The reserves also represent about six times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity, he added.
According to the World Gold Council, the Philippine gold reserves averaged 187.99 tons from 2000 until 2024. The gold reserves were highest at 274.42 tons in 1Q 2003 and lowest at 126.89 tons in 3Q 2007.
