The Bangko Sentral ng Pilipinas (BSP) on Monday refuted former president Rodrigo Duterte’s statement that President Ferdinand Marcos Jr. stole and sold the country’s gold reserves, which allegedly led to the peso’s depreciation.

Duterte made the statement against Marcos last Saturday during the Cebu People’s Indignation Rally, a campaign sortie in Mandaue City.

The BSP, in a statement to the media, said, “The country’s gross international reserves (GIR), including gold, are held and managed solely by the BSP in order to maintain the international stability and convertibility of the Philippine peso and meet any foreseeable net demands on the Bangko Sentral for foreign currencies.”

The BSP said trading in gold reserves is a common activity for all central banks to hedge against lower market prices of a country’s other assets and to ensure enough funds for national government projects and obligations in times of external crises.

It pointed out that gold reserves expand or contract depending on global market trends for the asset. Likewise, gold reserves may be limited due to storage costs, it added.

Aside from the BSP, newly appointed Presidential Communications Office Secretary Jay Ruiz and Senate President Francis Escudero also defended the President against Duterte’s tirade. (See related story).

“Gold prices tend to move in the opposite direction of other assets. However, gold prices can be volatile, and gold earns little interest and has storage costs, so central banks don’t want to hold too much,” the BSP said.

Gold holdings account for about 10 percent of the country’s gross international reserves. In the first half of 2024, the BSP sold 25.95 tons of gold, lowering its reserves by 15.69 percent to 134.06 tons.

The BSP said it took advantage of the higher global gold prices during the period, which went over $2,600 per ounce.

“This was more than 10 times higher compared to 23 to 24 years ago,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

As of September 2024, the Philippine GIR hit a record-high of $112 billion which translated to over eight months’ worth of imports of goods and payments of services and primary income for the country.

The GIR also consists of foreign investments, foreign exchange, and the country’s reserve position and special drawing rights in the International Monetary Fund.

Economists attributed last year’s peso depreciation to P59 per US dollar to the elevated interest rates of the Federal Reserve which increased demand for the foreign currency, and economic uncertainties due to the Russia-Ukraine war and the policies of US President Donald Trump, who was inaugurated on 20 January.

“It possibly reflects an exit of portfolio investments as foreign investors adjust to the business uncertainty of world finance under the Trump government,” University of the Philippines economics professor Ramon Clarete said.

Ricafort said the peso had weakened by 13 percent the last three years as investors sought more dollars from US-issued securities with elevated interest rates.

Duterte, along with his daughter Vice President Sara Duterte, has been on the warpath against Marcos, with a continuing exchange of words, including on the latter’s alleged drug use.

The House of Representatives, with 215 members voting for, impeached the Vice President for her alleged misuse of confidential funds and for threatening to have Marcos, First Lady Liza Araneta-Marcos, and House Speaker Martin Romualdez assassinated in the event she herself were killed.