Environment Secretary Ramon Paje
Environment Secretary Ramon Paje has asked the Presidential Anti-Organized Crime Task Force (Paoctf) to run after gold smugglers, saying they were sabotaging the economy.
Paje said he had written a letter to the Paoctf seeking the prosecution of those who sold gold mined in the Philippines abroad, thereby evading local taxes and depriving the Bangko Sentral ng Pilipinas (BSP) of a supply of the precious metal.
Only the BSP, which controls the government’s gold reserves, is authorized to buy and sell gold overseas.
“I have written to the anti-organized crime task force. This is economic sabotage,” Paje said in a recent interview. He said the process of taking gold from local small-scale miners, who mine 60 percent of the gold in the Philippines, and handing it to foreign buyers was a complex operation that involved skirting customs and tax laws.
Earlier, Paje raised the alarm on the declining sales of gold to the BSP.
According to the Department of Environment and Natural Resources (DENR), which oversees the mining industry, gold purchases by the BSP from small-scale miners declined 76 percent to 1,722 kilograms in the third quarter last year from 7,166 kg in 2010.
In terms of value, it dropped from P12.32 billion in 2010 to P3.55 billion in the same period in 2011, the DENR said.
Paje suspected that the precious metal was being smuggled out of the country because sellers want to avoid the two-percent excise and the five-percent withholding taxes imposed by the BSP. The decline in the BSP’s gold-buying activity came at a time when central banks worldwide were stepping up gold purchases to boost their reserves.
Central banks, especially those in emerging economies, have accelerated gold purchases in recent months to diversify growing foreign exchange reserves, with official sector gold purchases in the third quarter surging over fivefold from a year ago to 148.4 tons, according to the World Gold Council.
Data from the International Monetary Fund showed the BSP’s gold holdings fell the most so far this year among central banks. Mexico, Russia and Thailand were the biggest buyers.