THE Bangko Sentral ng Pilipinas (BSP) said it uses gold sales to manage foreign exchange reserves, after the Palace rejected allegations from former President Rodrigo R. Duterte that the gold was being stolen.
“The country’s gross international reserves (GIR), including gold, are held and managed solely by the BSP in order to maintain the international stability and convertibility of the Philippine peso and meet any foreseeable net demands on the Bangko Sentral for foreign currencies.”
“The country’s GIR is not used for any other purpose other than meeting the country’s forex requirements.”
Mr. Duterte had alleged that President Ferdinand R. Marcos, Jr. is “stealing gold reserves.”
Presidential Communications Office Undersecretary Claire A. Castro said at a briefing on Monday that the palace is taking these allegations seriously and would like to dispel “fake news.”
“Did (Mr. Duterte) not have any economic experts telling him about the regular activities of the BSP?” Ms. Castro said.
The BSP said buying and selling gold is “part of its core functions.”
“When the BSP sells gold, the proceeds revert to and stay within the GIR,” it added.
The central bank reported that reserves stood at $106.84 billion in 2024, up 3%.
“Similar to other central banks, the BSP maintains a portion of its reserves in gold as part of the country’s GIR mostly to hedge against/offset movements in the market price of other assets. It buys or sells gold to maintain an optimum level for this purpose, not too much, not too little. This follows basic portfolio-management principles.”
“Gold prices tend to move in the opposite direction of other assets. Therefore central banks hold some gold as a hedge against price declines in other assets in the reserves. However gold can be volatile, earn little interest, and (entails) storage costs, so central banks don’t want to hold too much.” — Luisa Maria Jacinta C. Jocson
