Monetary authorities are trying to encourage small-scale miners to sell more gold to the Philippine central bank after through tax exemptions.
“We’re looking at making our rates more attractive to small scale miners,” Joseph Norbert S. David, director of the central bank’s Mint and Refinery Operations Department told an online lecture on Friday. “We’re also looking at minimizing the processing costs.”
Mr. David said gold sellers get 99% in advanced payment. The remaining 1% “retention money” is settled once they complete the assaying of the gold.
The Bangko Sentral ng Pilipinas is considering increasing the advanced payment further, he added. It might also fast-track processing of payments to attract more small miners.
“We’re trying to fast-track the turnaround time,” Mr. David said “We’re looking at possibilities on how to minimize the turnaround time of the payments and final assaying of golds sold to us.”
Much of the gold output comes from Baguio and Davao, he said.
The initiatives are expected to spur small-scale miners to sell gold to the central bank instead of the black market.
“Unfortunately, we have unverified reports and some studies that there are sellers who still go to the black market” Mr. David said. “Improving our rates, our prices and our operations by reducing our cost is one way of addressing this.”
The central bank’s gold holdings stood at $9.148 billion as of end-August, 0.7% higher than in July but 24% lower year on year.
A 2019 law exempted small-scale miners and traders from paying tax for gold sold to the BSP to strengthen the country’s foreign exchange buffers.
The gross international reserves rose by 0.7% to $107.96 billion as of end-August from a month earlier, according to the latest BSP data.
Last year, the central bank said it would shift to active gold trading amid rising prices of gold, which is considered a safe-haven asset during crises. — Luz Wendy T. Noble