The Central Bank of the Philippines (BSP) published an explainer on how the Philippines’ gross international reserves (GIR), including gold, are held and managed solely by the BSP to support the international stability and convertibility of the Philippine peso and to meet foreseeable net foreign-currency demands on the central bank. It stressed that GIR are used only to meet the country’s foreign-exchange requirements and that gold purchases and sales are part of the BSP’s core functions, with proceeds from any gold sales remaining within the GIR; GIR increased to USD 106.3 billion from USD 103.8 billion in 2023. The BSP also set out its rationale for holding gold as part of reserves, describing it as a hedge intended to offset movements in the market prices of other reserve assets and noting that it buys or sells gold to maintain an “optimum” level. While gold can help diversify reserves because its price tends to move in the opposite direction of other assets, the BSP noted that gold can be volatile, generates little interest income, and incurs storage costs, which is why it does not aim to hold an excessive allocation.
Central Bank of the Philippines 2025-02-24
Central Bank of the Philippines clarifies gold trading as part of reserve management as gross international reserves rise to USD 106.3 billion
The Central Bank of the Philippines (BSP) detailed its management of the country's gross international reserves (GIR), which rose to USD 106.3 billion, emphasizing their role in supporting the peso's stability and meeting foreign-currency demands. The BSP explained its strategy of holding gold as a hedge against market fluctuations, acknowledging the asset's volatility and costs. Gold transactions maintain an optimal reserve level, with proceeds from sales reinvested into the GIR.