Central bank: 95% of mined Philippines gold is smuggled out

Sovereign Man in his Notes from the Field section takes a look at the booming black market for gold in places like Sierra Leone, Mongolia and elsewhere and finds the Philippines to be a hotbed for smuggling of the precious metal:

“As the law stands, all gold and silver produced must be sold to the Bangko Sentral, the country’s central bank.  Yet after the government started enforcing a 7% tax on precious metals last year, most small-scale producers are now selling to smugglers instead.

“According to Assistant Central Bank Governor Manuel Torres, who heads the bank’s refinery operations, as much as 95% of all the gold mined in the Philippines is now being sold to smugglers and moved out of the country illegally.

“And the trend has been accelerating. In 2011, central bank gold purchases dropped at an annualized rate of 4%, then 76%, then 88% during the second, third, and fourth quarters. In the first quarter of 2012, gold purchases were down 92%. It’s staggering.”

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