In recent months, former Philippine President Rodrigo Duterte has made waves with his public statements regarding the country’s gold reserves. During campaign rallies and various public appearances, Duterte suggested that there was a lack of transparency in the sale of the Philippines’ gold reserves under President Bongbong Marcos. His remarks have fueled speculation about financial mismanagement and raised concerns that the country might be “running out of money.”
But what exactly is happening with the Philippines’ gold reserves?
A Significant Drop in Gold Reserves
The numbers paint a striking picture. The Philippines’ gold reserves have indeed declined significantly over the past year. According to available data, the country’s reserves dropped from 164.77 tonnes in Q3 2023 to just 128.12 tonnes in Q3 2024—a substantial decrease within a short period. Duterte pointed to this drop as evidence of mismanagement and questioned the transparency surrounding these transactions, stating that there was no clear information on where the gold was sold or for how much.
Understanding the Role of the BSP
However, what many might not realize is that the sale of gold reserves falls under the jurisdiction of the Bangko Sentral ng Pilipinas (BSP), the country’s central bank. The BSP operates independently from the executive branch and is responsible for managing the country’s monetary policy, foreign exchange reserves, and financial stability. This means that decisions regarding the sale of gold, foreign exchange management, and monetary policies are not dictated by the President or other political figures.
Historically, the BSP has been well-regarded for its financial management. Former BSP Governor Benjamin Diokno was recognized as one of the world’s best central bankers by Global Finance Magazine, and the current BSP Governor, Eli M. Remolona, Jr., has an extensive background that includes over three decades of experience in major financial institutions such as the Federal Reserve Bank of New York and the Bank for International Settlements (BIS).
Given their expertise, the BSP’s leadership makes strategic decisions on when and how to sell gold based on market conditions and economic priorities, not political influence. So why is Duterte questioning these transactions?
Duterte’s Political Maneuvering
Duterte’s allegations must be viewed within the context of the Philippines’ political landscape. His criticisms of the Marcos administration’s handling of national assets could serve as a political strategy to weaken his opponents while rallying his base. By raising doubts about financial transparency, Duterte could be positioning himself—or his allies—for future political gains.
The BSP has responded to these allegations, emphasizing that its operations remain transparent and are in line with standard financial protocols. In press briefings, the BSP clarified that gold sales are part of routine portfolio management, aimed at optimizing the country’s financial assets. The proceeds from gold sales are not lost or misused; instead, they remain within the Gross International Reserves (GIR), ensuring economic stability.
Gold Reserves vs. Gross International Reserves
While the country’s gold reserves have decreased, its Gross International Reserves (GIR) have remained stable or even increased. In Q3 2023, the Philippines’ GIR stood at $99 billion, while in September 2024, it had risen to over $112 billion. This indicates that the funds from gold sales were reinvested into other reserve assets, rather than being depleted or mismanaged.
The Presidential Communications Office (PCO) also weighed in on the issue, with Undersecretary Claire Castro dismissing Duterte’s claims as “campaign jokes” and warning against misinformation. She pointed out that Duterte’s remarks reflect a misunderstanding of how the BSP operates, reinforcing that the central bank functions independently of political influence.
Why Did the BSP Sell Gold?
One of the biggest reasons for the BSP’s gold sales is the rise in global gold prices. Since 2019, the price of gold has surged dramatically. Before the COVID-19 pandemic, gold was priced at around $1,700 per ounce. By 2024, it had skyrocketed to over $2,800 per ounce. Given this significant increase, selling gold at a high price allows the BSP to generate additional revenue, which can then be reinvested into other reserve assets.
Furthermore, selling gold is not an unprecedented move. During Duterte’s own presidency, the Philippines also sold gold reserves. In 2020, the country’s gold reserves stood at 197 tonnes, but by 2022, when Duterte’s term ended, the reserves had already dropped to 153 tonnes. Despite this decrease, Duterte did not raise concerns about transparency or mismanagement at the time. This raises the question: is his current criticism based on actual financial mismanagement, or is it politically motivated?
Conclusion: A Politically Charged Debate
There is no credible evidence to suggest that President Bongbong Marcos personally orchestrated or benefited from the sale of the country’s gold reserves. The BSP, an independent institution, is responsible for these financial decisions, and historical data shows that similar sales occurred under previous administrations—including Duterte’s own.
Ultimately, Duterte’s claims appear to be more about political rhetoric than actual financial concerns. The BSP has maintained that its transactions are transparent and follow strict financial protocols, while the government insists that the country’s financial stability remains intact.
As the political landscape in the Philippines continues to evolve, these debates over economic management and transparency will likely remain central issues. However, it is crucial to separate economic facts from political narratives to fully understand the country’s financial direction.