The Bangko Sentral ng Pilipinas (BSP) said Monday it exclusively manages the country’s gross international reserves (GIR), including gold, to ensure the stability and convertibility of the peso and meet potential foreign currency demands.
It made the statement after former President Rodrigo Duterte alleged during a political rally in Mandaue City on Saturday that incumbent President Ferdinand Marcos Jr. stole the country’s gold reserves. “They have been selling our gold until now, and there’s very little left. So how will the economy stand in the future?” Duterte said.
The BSP said, however, the country’s gross international reserved could not used for any other purpose other than meeting the country’s foreign exchange requirements.
Tasked to manage the country’s external accounts, the BSP said it has been buying and selling gold over the years as part of its core functions.
When the BSP sells gold, the proceeds revert to and stay within the GIR. Last year, the GIR rose to $106.3 billion from $103.8 billion in 2023.
Similar to other central banks, the BSP said it 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.
“The BSP buys or sells gold to maintain an optimum level for this purpose, not too much, not too little. This follows basic portfolio-management principles,” it said.
“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,” the BSP said.
“However gold prices can be volatile, earns little interest, and has storage costs, so central banks don’t want to hold too much,” it said.