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Angara to Senate: Pass ‘gold bill’ to boost PH foreign reserves
Senator Juan Edgardo “Sonny” Angara pressed his colleagues to expedite the passage of the measure that seeks to boost the country’s gross international reserves (GIR) by granting tax exemptions to small-scale miners who would sell their gold to the Bangko Sentral ng Pilipinas (BSP).
“I strongly urge the honorable members of the Philippine Senate to approve the passage of this ‘Gold Bill’ to ensure the strength of the country’s [GIR] and promote the Philippines’ greater monetary and external sector stability,” said Angara, chair of the Senate ways and means committee, in his recent sponsorship speech on Senate Bill No. 2127.
The bill seeks to amend Sections 32 and 151 of the National Internal Revenue Code to make the sale of gold from small-scale miners to the BSP exempt from income and excise taxes, Manila Bulletin reported.
The tax exemptions cover proceeds from “sale of gold to the BSP by registered small-scale miners” and “sale of gold by registered small-scale miners to accredited traders for eventual sale to the BSP.”
Angara said the measure is a “win-win” solution for both the BSP and small-scale miners.
The senator said passage of the bill into law would not only allow the BSP to shore up the country’s GIR which dropped to a seven-year low in October, but would also help support the development of the small-scale mining industry as envisioned by Republic Act 7076, or the People’s Small-Scale Mining Act of 1999.
“The proposed legislation would have the effect of assisting the BSP in the fulfillment of its mandate under its charter, returning to the formal sector the sale of gold from small-scale mining, and support the trade of small-scale miners as originally envisioned under RA 7076,” Angara said.
The GIR is the sum of all foreign currencies, including gold, held by the BSP. It serves as a buffer to ensure that the Philippines would not run out of foreign reserves that it could use to pay for imported goods and services, or maturing obligations in case of external shocks.
Earlier, Angara said the BSP reported that the country’s GIR level last October was $74.8 billion, the lowest since hitting $71.88 billion in July 2011.
Angara said the measure would enable the BSP to better build up the GIR by buying domestically produced gold from small-scale miners using pesos.
He said buying gold from the domestic market would boost the GIR as opposed to purchasing gold using dollars, which affects the money supply with potential inflationary effects.
“The bill also helps small-scale miners, who prefer to sell their gold to the BSP, which ensures that they would be able to receive a fair price for their gold, instead of selling the gold to the black market where prices are below market levels,” Angara said.