PH Sold 24.9 Tonnes of Gold in H1 2024; Part of Strategy, Says BSP

The Bangko Sentral ng Pilipinas (BSP) defended its decision to sell 24.9 tonnes of gold in the first half of 2024, explaining that the move was part of an “active management strategy” for the country’s gold reserves.

“The BSP took advantage of the higher prices of gold in the market and generated additional income without compromising the primary objectives for holding gold, which are insurance and safety,” the central bank stated.

This clarification came after BestBrokers, an online aggregator, reported that the Philippines sold the most gold among countries that disclosed activities to the World Gold Council (WGC) during the first half of the year. The sales reduced the country’s gold reserves by 15.69%, bringing the total to 134.06 tonnes as of June 2024, compared to the 1.33 tonnes added in the previous year.

Following the Philippines, other countries that reduced their gold holdings include Thailand (9.64 tonnes, down 3.95%), Uzbekistan (6.22 tonnes, down 1.67%), Mongolia (1.33 tonnes, down 22.06%), and Singapore (1.18 tonnes, down 0.51%).

According to the WGC, the Philippines ranked 31st in terms of gold holdings as of June 2024, with 132.7 tonnes, accounting for 9.8% of the country’s reserves. Gold reserves are a crucial component of the country’s gross international reserves (GIR), which measure the ability to pay for imports and service foreign debt.

As of the end of August, the BSP reported a GIR level of $106.9 billion, up from $106.73 billion in July and $99.567 billion in August 2023. This amount is equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income, providing a significant external liquidity buffer.

“The GIR level provides adequate external liquidity buffer and is equivalent to 6.0 times the country’s short-term external debt based on original maturity, and 3.8 times based on residual maturity,” the BSP added.