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I have received many inquiries from various individuals and groups on how they could sell gold to the Bangko Sentral ng Pilipinas (BSP) — the processes involved, the procedures they have to go through, and the people they have to deal with.
For the information of those who are interested to know, there are two laws that authorize the BSP to buy gold from the public: Republic Act 7653, the New Central Bank Act of 1993, and Republic Act 7076 or the People’s Small-Scale Mining Act of 1991.
The New Central Bank Act states that the BSP may buy and sell gold in any form. According to the BSP’s Mint and Refinery Operations Division (MROD), the BSP buys all kinds of gold from mined gold to pawned gold items (even gold dentures!).
The law also provides that the international reserves of the BSP may include gold and assets in foreign currencies. The BSP’s purchase of gold therefore helps strengthen the country’s international
The People’s Small-Scale Mining Act, on the other hand, specifies that all gold produced by small-scale miners shall be sold to the BSP, which in turn shall buy it at prices competitive with those prevailing in the world market regardless of volume or weight.
This law was enacted in line with the government’s policy to promote, develop, protect, and rationalize viable small-scale mining activities, which rely heavily on manual labor using simple implements and methods, in order to generate more employment opportunities.
Small-scale miners refer to Filipino citizens who voluntarily form a cooperative licensed by the Department of Environment and Natural Resources (DENR) to engage in the extraction or removal of minerals or ore-bearing materials from the ground. These miners do not use explosives or heavy mining equipment.
The People’s Small-Scale Mining Act also requires the BSP to establish as many buying stations in gold rush areas to fully service the requirements of the small-scale miners in those localities.
The BSP has a gold-buying station at the Security Plant Complex in Quezon City, and in BSP offices in the cities of Davao, Zamboanga, Baguio, and Naga.
Mario Fragata, officer-in-charge of the gold-buying unit of BSP’s Mint and Refinery Operations Division (MROD), said that there are limits to the amount of gold that the BSP may purchase from each seller daily.
Each seller is allowed only two transactions per day, with each transaction consisting of not more than 10 kilos or 320 troy ounces of gold.
Fragata said that gold traders interested in selling their gold to the BSP should fill up a “Letter of Delivery and Sale” and submit it to the MROD’s Office of the Director.
The “Letter of Delivery and Sale,” which is provided by the BSP, should indicate that the gold is offered for sale for value on the date of delivery and must be submitted not later than 2 p.m. of the advice date.
Fragata said that 99 percent of the payment will be given to the seller on the following business day. The balance will be settled upon completion of evaluation melting and final assay or within 30 days from the date of delivery or sale.
The BSP will also deduct processing and metal recovery factors from the payment, he added.