The Department of Environment and Natural Resources (DENR) is seeking the help of the Presidential Anti-Organized Crime Task Force (PAOCTF) under the Office of the President to stop the massive smuggling of gold in the country.
This came in the wake of the report of the Mines and Geosciences Bureau (MGB) that the total Philippine metallic mineral production value during the first quarter of 2012 declined by a staggering 38%, from PhP31.40 billion to PhP19.61 billion year-on-year, or a shortfall of PhP11.79 billion.
DENR Secretary Ramon J. P. Paje said the sluggish performance of the metallic minerals during the quarter was largely due to the 92% plunge in the gold purchases of the Bangko Sentral Ng Pilipinas (BSP) from small-scale miners and traders.
According to him, the gold purchases of BSP from small-scale miners and traders went down to a dismal 618 kilograms with total value of PhP1.35 billion during the first quarter as against 7,493 kilograms of gold purchased in the same period last year valued at PhP14.11 billion.
Paje added that the downfall of gold purchases started during the second semester of 2011 when the Bureau of Internal Revenue (BIR) strictly imposed the collection of the 2% excise tax and 10% creditable withholding tax (CWT) from the sale of gold by small-scale miners and traders pursuant to Revenue Regulations No. 7-2008 dated March 25, 2008, entitled “Taxation on the Sale to the Bangko Sentral ng Pilipinas of Gold and Other Metallic Mineral Products Extracted or Produced by Small-Scale Miners, and Further Amending Section 2.57.2 (T) of Revenue Regulations No. 2-98, as Amended.”
Said regulation was superseded by Revenue Regulations No. 6-2012 dated April 2, 2012, which reduced the CWT from 10% to 5% effective April 2012. The BSP, through its five buying stations in Baguio City, Davao City, Zamboanga City, Naga City and Quezon City, deducts the corresponding taxes from small-scale miners/traders and remit the same to the BIR.
“Given the continuing high price of gold and the increasing number of small-scale mining areas, the decrease in gold purchases by the BSP clearly means that gold outputs are going to the black market and smuggling activities,” Paje stressed.
As a consequence, total gold output plummeted by 65% and 57% in volume and value, respectively, from 11,427 kilograms valued at PhP21.63 billion to 4,056 kilograms valued at PhP9.33 billion year-on-year.
Aside from gold, both silver and chromite also suffered deficits in mine output. Copper, zinc, nickel and iron, on the other hand, enjoyed growths during the same period.
The country’s production stream includes 19 nickel mines; six gold mines with silver as co-product; three copper mines with gold and silver as co-products; a polymetallic mine with gold, silver, copper and zinc as products; two chromite mines; a nickel plant; and several small-scale gold mining operations.
In terms of prices, gold and silver continued to enjoy better prices in Q1-2012 as against Q1-2011. Prices of the yellow and white metals were up by 21.95% and 2.68%, respectively. The yellow metal traded above the $1,600 per troy ounce level, the highest of which was $1,743 per troy ounce recorded in February 2012. It is projected that gold will most probably continue to be strong in 2012 as global economy has not yet fully recovered from the worldwide financial crisis. Thus, the role of gold, including silver, as safe haven for investment in times of economic difficulties will still very much come into play.
MGB Director Leo L . Jasareno disclosed that gold production in the second quarter of 2012 is expected to increase, with the entry of the country’s 33rd metallic mine, the Siana Gold Project of Greenstone Resources in Surigao del Norte.
Jasareno also reported that the entry of the following new producers will also most likely boost the mine output of nickel, chromite and iron in 2012: (1) Casiguran Nickel Project of Century Peak Corporation in Dinagat Islands; (2) Sta. Cruz Candelaria Nickel Project of Eramen Minerals, Inc. in Zambales; (3) HY Nickel-Chromite Project of Sinosteel Phils. HY Mining Corporation in Dinagat Islands; (4) Elluvial Chromite Mining and Concentration Project of Mt. Sinai Mining Exploration and Development Corporation in Eastern Samar; and (5) Leyte Iron Sand Project of Strong Built Mining Development Corporation in Leyte.
Metallic Mineral Production
Q1-2012 vs. Q12011
Value (In PhP)
Value (In PhP)
Copper Metal Equivalent
Mixed Nickel Sulphides
Nickel Content of Nickel Sulphides
Nickel Direct Shipping Ore
Nickel Content of Ore
Metallurgical Chromite Ore
- Published: 10 June 2012