MANILA - The Bangko Sentral ng Pilipinas will start trading gold as prices surge due to the "decreasing confidence" in US dollars, Governor Benjamin Diokno said Monday.
The Philippines has "more than optimal" gold at about more than 10 percent of its gross international reserves, Diokno told ANC.
"I think we have excess gold bars in relation to our gross international reserves that we may trade as the need arises," Diokno said.
"I said, 'why are we not trading?' and they said that was the policy, they called it passive policy. So I said 'why don’t we trade now considering that our estimate... that our gold holdings at the moment is more than the optimal'," he added.
The price of gold is now $1,900 to $2,000 per ounce from just $1,400, he said.
Over the weekend, the BSP announced that it would shift to active gold trading from the existing "passive" policy "due to the change in the price dynamics of gold."
Diokno said a new law was also passed making the BSP's gold purchase from small miners more attractive. President Rodrigo Duterte in May 2019, signed a law exempting from tax small-scale miners who sell gold to the BSP.
The country's GIR has grown to about $100 billion, the "highest ever in Philippine history," the BSP earlier said.
Gold broke above $2,000 per ounce this month, making the precious metal one of 2020's best performing mainstream assets so far.
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