Manila: The Bangko Sentral ng Pilipinas (BSP) on Monday clarified that the country's gross international reserves (GIR), including gold, are exclusively managed by the central bank to ensure the international stability and convertibility of the Philippine peso and fulfill any foreseeable net demands for foreign currencies.

According to Philippines News Agency, the BSP emphasized that the country's GIR is dedicated solely to meeting the nation's foreign exchange requirements. This statement from the central bank was released following allegations made by former President Rodrigo Duterte, accusing President Ferdinand R. Marcos Jr.'s family of misappropriating and selling the country's gold reserves.

The BSP, which is responsible for managing the country's external accounts, has been engaging in the buying and selling of gold over the years as part of its essential functions. The central bank clarified that proceeds from gold sales are reintegrated into the GIR. In 2024, the GIR increased to USD106.3 billion, compared to USD103.8 billion in 2023.

The BSP maintains a portion of its reserves in gold to hedge against or offset market price movements of other assets. The bank follows basic portfolio-management principles, ensuring an optimal level of gold reserves. It highlighted that gold prices generally move inversely to other assets, serving as a hedge against declines in other reserve assets. However, due to gold's volatility, low interest returns, and storage costs, central banks aim to maintain a balanced gold reserve.