By ERIK ESPINA
In late 1969, during the Senate incumbency of my father Rene Espina, he wrote a draft for a bill to be filed, requiring the Philippine government to purchase majority (80% if memory serves) of the gold mined and produced in the country. He foresaw a finite mineral and national wealth, backing the Philippine peso and economy. Prospectively, it would be a safety net against what was already back then, increasing signs of competitive trade and commerce in today’s phenomenon of globalization. The economies, markets, investments, etc., of the world inter-connected, with Asian financial crisis and hyperinflation particularly in a world under a “fiat currency,” highly probable in the not so distant future?
Gold is generally a desirable means of exchange (convertible to any currency) to barter for political and economic advantages. My father saw gold as a secondary reserve, in case international currencies, went south. Central Bank officials (forerunner to the Bangko Sentral ng Pilipinas) were lukewarm to the idea. World gold prices were stable and as a commodity, less profound as paper currencies.
Philippine gold became an “emergency currency” in the 70’s during the energy/gasoline crisis. According to former First Lady Imelda Marcos, traditional petroleum suppliers from the Middle East were pressured not to sell Arab oil to the country. In our conversation with Mrs. Marcos, she described her special travel abroad to appeal before the king of this oil rich nation. Initially declined by her host, she retorted, “Oh but your Royal Highness, we will not pay you in dollars, but in gold.” The deal was struck.
Today, central banks of different countries are boosting their respective gold holdings.