Tolentino warns BSP vs selling gold reserves during pandemic

MANILA, Philippines —  Senator Francis Tolentino on Thursday cautioned the Bangko Sentral ng Pilipinas (BSP) that selling a small portion of the Philippines’ gold reserves amid the COVID-19 pandemic may be in violation of the law.

During the Senate finance committee’s deliberation on the proposed P4.506 trillion national budget for 2021, Tolentino told BSP Deputy Governor Francisco Dakila that certain provisions of Republic Act No. 7653 or the New Central Bank Act of 1993 may limit the selling of the country’s gold reserves during emergency situations.

“The BSP family should be aware of RA 7653 specifically Section 72 and I quote, ’emergency restrictions on exchange operations… they may temporarily suspend or restrict the sales of gold’,” Tolentino pointed out.

Tolentino raised this concern amid reports that BSP is considering to sell parts of its gold reserve in a bid to reduce its share from the country’s gross international reserves (GIR).

It was also previously reported that the country’s gold reserve has reached an all-time high of P98.6 billion.

But Dakila told the senator that “it is not really the majority of the gold portion of the reserves that are going to be sold.”

Dakila said that as clarified by BSP Governor  Benjamin Diokno, the guidance is for about 10 percent of the country’s GIR to be allocated for gold.

He also clarified that the planned selling of gold reserves is not only at the discretion of the BSP’s treasury department but is also guided by the Monetary Board’s policy.

Still, Tolentino said: “So any action taken, the discretionary actions taken by the Treasury Department even it is pursuant to a Monetary Board resolution, should take into account the national emergency we are in right now.”