The Bangko Sentral ng Pilipinas (BSP) said it has sold gold in the first half of this year to take advantage of the higher prices of gold in the global market, to earn additional income and as part of its reserves management.
“Amid the gold sales, the country’s GIR (gross international reserves) has remained robust,” the BSP emphasized in reaction to a report that said the BSP has sold a lot of gold – more than other countries – in the first six months of the year.
The central bank sells gold as well as buys gold as part of its reserves management while keeping its gold hoard stable.
In a statement Tuesday, Sept. 24, the BSP said selling gold is part of its “active management strategy” of the GIR. As of end-August, the GIR totaled $107.857 billion, up from end-July of $106.737 billion and also higher than same time in 2023 of $99.567 billion.
For the first eight months, the BSP has gold reserves amounting to $10.221 billion, based on the GIR. The amount is slightly lower compared to same period last year of $10.231 billion. The end-July gold reserves totaled $10.312 billion.
According to the BSP, it “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 latest GIR level of $107.857 billion is “more than adequate external liquidity buffer,” said the BSP earlier.
It is equivalent to 7.8 months’ worth of imports of goods and payments of services and primary income. It is also six times the country’s short-term external debt based on original maturity and 3.8 times based on residual maturity.
A country’s GIR is sufficient if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income. It will also be considered adequate if it will have at least 100 percent cover for the payment of foreign liabilities for both the public and private sector.
The BSP’s reserve assets are composed of gold, foreign investments, foreign exchange, reserve position in the International Monetary Fund, and special drawing rights or SDRs in the IMF.
The BSP did not cite the report directly, but based on a report by online brokerage BestBrokers dated Sept. 19, since January this year the BSP was noted as selling the most gold among other monitored central banks and other countries.
BestBrokers said the BSP has sold the most gold in the first half of 2024 at 24.95 tonnes which slashed its gold reserves by 15.69 percent to 134.06 tonnes versus its fourth quarter 2023 reserves.
In comparison, the second country identified as selling the most gold was Thailand with 9.64 tonnes which decreased its gold reserves by 3.95 percent.
Thailand was followed by Uzbekistan which sold 6.22 tonnes of gold that cut its reserves by 1.67 percent; Mongolia sold 1.33 tonnes, reducing its reserves by 22.06 percent; Singapore sold 1.18 tonnes, its reserves down 0.51 percent; Germany sold 1.12 tonnes or 0.03 percent off its own reserves. Other countries are Jordan which sold 1.11 tonnes of gold (1.56 percent); Cambodia, 0.31 tonnes (0.73 percent); Suriname, 0.25 tonnes (17.12 percent); and Malta, 0.06 tonnes (21.43 percent).