MANILA - The Bangko Sentral ng Pilipinas (BSP) on Tuesday confirmed that it sold gold during the first half of the year, following a report that said the country's central bank was the largest seller of the precious metal during the period.

The BSP said this was part of its active management strategy of the country’s gold reserves, which form part of the country’s Gross International Reserves (GIR).

International brokerage tracking website bestbrokers.com earlier showed data from the World Gold Council which said that the Philippines sold 24.95 tonnes of gold in the first half of the year, making the country the largest seller of gold during the period.

The BSP however did not comment on the almost 25-tonne figure cited in the report.

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According to bestbrokers.com, the gold sales reduced the Philippine gold reserves from 159.05 tonnes at the end of 2023, to 134.06 tonnes at the end of the first half of 2024.

In September 2020, then BSP Governor Benjamin Diokno said the central bank would take advantage of the "gold rush" as prices of the precious metal reached $1900 per ounce from just $1,400 earlier in the year.

Gold is generally seen as a safe haven asset, which means it retains its value amid economic uncertainties and fluctuations in the foreign exchange.  During times of uncertainty, it also appreciates in value. Gold prices are currently trading around $2,600 per oz on the world market.

"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," the central bank said in the statement issued Tuesday.

According to the website of the World Gold Council, the Philippines is the third largest producer of gold in Asia, behind China and Indonesia. In 2023, the Philippines produced 40.8 tonnes of gold.

In 2019, the Philippines passed a law exempting small-scale gold miners from taxation if they sell gold to the BSP. The new law also covered small-scale miners who sell gold to accredited traders for the eventual disposal to the central bank.

Before this, the BSP had been trying to woo to small-scale miners to sell their gold to them instead of the black market to build up the country's foreign exchange reserves.

The BSP said that amid the gold sales, the country’s GIR has remained robust, with the end-August 2024 figure rising to $107.9 billion from US$103.8 billion as of end-December 2023.

At this level, the country has enough reserves for 7.8 months’ worth of imports of goods and payments of services and primary income.

"It also represents about 6.0 times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity," the BSP said. 

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