Black market shoots up gold price, BSP buying dips

October 20, 2019 Headlines

BAGUIO CITY – The Bangko Sentral ng Pilipinas (BSP) reported its gold purchases from small-scale miners in the Cordilleras has dropped ‘significantly’ in span of almost three years (2017-2019). BSP assistant governor Iluminada Sicat recently said, the decline was mainly due to the higher price being offered by ‘private traders’ as compared to BSP.
Sicat said BSP’s gold purchases accounted for only 191.06 kilograms (P396 million) in January to September this year as against the 297.45 kg. (P580 million) it bought in 2018 and 354.12 kg. (P655 million) it purchased in 2017, respectively.
The BSP is mandated by law to purchase gold from local small scale miners. This is in accordance with Republic Act No. 7076 known as the People’s Small Scale Mining Act of 1991.
The continuing high price of gold which pocket miners want to take advantage, saw the decrease of gold purchases, indicating that gold outputs are allegedly going to the black market .
The other reason in the decline of gold purchase was when the Bureau of Internal Revenue (BIR) imposed the collection of the 2% excise tax and 5% creditable withholding tax (CWT) from the sale of gold by small-scale miners and traders.
Sales to the BSP are subject to taxes paid to the government, reducing the pocket miners’ profits. Also the stoppage order by Secretary Roy Cimatu of the Department of Environment and Natural Resources (DENR) against illegal small scale mining operations in the region.
 
Primo Agatep/ABN