MANILA, Philippines – President Rodrigo Duterte signed into law a measure exempting small-scale miners from taxes in selling gold to the Bangko Sentral ng Pilipinas (BSP).
In a statement on Wednesday, May 22, the BSP said Duterte signed Republic Act No. 11256 or the Act to Strengthen the Country’s Gross International Reserves (GIR) last March 29.
The new law also covers the sale of gold by small-scale miners to accredited traders for eventual disposal to the BSP.
The law seeks to remedy the drastic 99% drop in the central bank’s gold purchases. From more than 900,000 fine troy ounces (FTO) in 2010, the BSP has only purchased some 10,000 FTO in 2019 due to the taxes which have been slapped on gold sales to the BSP since July 2011.
With the new law, the BSP said it can now increase its purchase of domestic gold to build up the country’s GIR, which serves as the primary buffer against external economic shocks.
The BSP added that the new law would prevent smuggling of Philippine gold through the black market and allow small-scale miners to sell gold at international market prices.
“Aside from helping build up the foreign reserves of the country, the law is expected to also lead to greater availability of gold in the domestic markets for jewelry making, dental requirements, and other industrial and commercial uses,” the BSP said.
The country’s GIR went up to $83.2 billion as of end-March 2019 partly due to government deposits to the BSP, according to a statement attributed to BSP Governor Benjamin Diokno.
As of April 2019, the country’s GIR stood at $83.9 billion. Of the total, gold reserves stood at $8.1 billion.
In 2018, the GIR rose to a total of $79 billion, $1 billion lower than the original projection of the central bank. – Rappler.com