Solon wants to probe the decrease in BSP’s gold purchase

A LAWMAKER has called for a congressional inquiry on the reported significant decrease in the purchases of gold by the Bangko Sentral ng Pilipinas (BSP), which is a cause for concern considering the role of gold in the economy of the nation.

Rep. Angelo Palmones (Party-list, Agham) filed House Resolution 2747 urging the House Committees on Economic Affairs and Natural Resources to conduct a probe on why the gold purchases by the BSP for the first 6 months of 2012 amounted only to 786 kilograms compared to 15,003 kilograms of the previous year.

“Gold was considered a top foreign exchange earner since 2005 and reported to have generated unprecedented earnings of $1,674.1 billion or P73,450.8 billion in 2010,” Palmones said.

Palmones said among the abundant mineral resources of the country, gold is considered as the most important commodity in the mining industry.

Citing a report conducted by the National Statistics Coordinating Board, Palmones said the country has vast gold reserves in different regions of the country, the highest of which can be found in Region 12 estimated at 2,189 billion metric tons, while the highest quality of gold reserve is in Region 8 with an average of 11.4 gm Au/mt.

“In addition to being a precious metal used in jewelry, gold is used for money, stored in value and which volume in reserve is equated to economic fluidity and stability,” Palmones said.

Palmones said the BSP purchased from various small scale producers 17,389 kilograms of gold valued at P34,128,944,965.

Palmones cited Secretary Ramon Paje of the Department of Environment and Natural Resources (DENR) who said that the decrease in gold purchases by the BSP is due to the continuing high price of gold and the increasing number of small-scale mining areas, which is a clear indication that gold output is going to the black market and smuggling activities.

Palmones said according to the Mines and Geosciences Bureau, the decline in gold purchases started in the second half of 2011 when the Bureau of Internal Revenue imposed a 2-percent excise tax and 10-percent withholding tax from the sale of small-scale miners and traders. The BIR reduced the withholding tax to 5 percent in April this year.

“It is the responsibility of the State to promote the rational exploration, development, utilization and conservation of the country’s mineral resources to enhance national growth in a way that effectively safeguards the environment and protect the rights of affected communities,” Palmones stressed.

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