There is money in gold

Gold is a precious metal and it defines the economic strength and stability of a country. The United States holds the largest gold reserves in the world, estimated at 8,133.46 metric tons.

The strongest economies in the world are the US, China, Germany and Japan. China is on a gold-buying spree and just this week it announced that its reserves had risen to 2,279.6 metric tons. It is also the biggest gold producer in the world followed by Russia and Australia.

Germany actually has the second biggest gold reserve at 3,351.53 metric tons, while Japan has 846 metric tons. However, there is no indication that there will be a lull in China’s gold-buying binge as it is part of its strategy to “diversify holdings and strengthen its economic position in the world.”

The Philippines has 150 tons of gold reserves after the Bangko Sentral ng Pilipinas (BSP) sold 25 tons last year, to whom and for how much we don’t know. No less than the President’s sister, Sen. Imee Marcos, castigated the country’s economic managers for the sale of the vital reserves.

The reason we predicated this column on the significant impact of gold on a country’s economy is to bring focus to our Bangko Sentral ng Pilipinas’ and the administration’s nonchalance with regard to the problem of gold miners cooperatives in Davao de Oro.

It looks like the gold miners’ cooperatives have put up their hands over the delay in the release by BSP-Davao of the 0.5 percent retained by the central bank of the value of the gold nuggets it purchases from the coop.

While I knew that Davao de Oro has the biggest gold deposits in the country and that BSP Davao buys what the mining cooperatives produce, it never occurred to me that BSP Davao withheld 0.5 percent of the value of the gold it buys.

An officer of the mining coop, who begged not to be identified, explained that BSP-Davao assays their gold deliveries, which average 200 kilograms per week and retains 0.5 percent of the value, which would only be released after the final assay by BSP-Manila of each shipment of gold. Previously, it took only a week for the retained amount to be released. Recently, however, the central bank has not released the amount, which is essential to the coop’s operations.

I cannot help but suspect something fishy in the delayed release of the coop’s retained payments that have accumulated.

Consider this. The price of gold is now at P6,000 per gram. A weekly delivery of gold to BSP Davao is 200 kilograms on average or 200,000 grams. This is P1.2 billion in any language. BSP Davao retains about P42 million for every 200 kilograms it buys from the coop.

Despite the delay, the mining coop still delivers to BSP 200 kilos of gold per week. Now that is beyond my simple math and my calculator to solve since it has been three weeks since the last payment.

The BSP should be more considerate of the mining cooperatives. There are about 5,000 small-scale miners in Davao de Oro. The government needs them to augment our gold reserves and the BSP’s lackadaisical concern for their plight must not be countenanced.

The government cannot afford to lose this vital resource should, because of the BSP’s utter neglect and indifference, some of the gold miners resort to smuggling and, who knows, fetch a better price for their gold nuggets somewhere else.