Manila Bulletin

Grow­ing Philip­pine gold re­serves

- ERIK ESPINA

In late 1969, dur­ing the Se­nate in­cum­bency of my father Rene Espina, he wrote a draft for a bill to be filed, re­quir­ing the Philip­pine gov­ern­ment to pur­chase ma­jor­ity (80% if mem­ory serves) of the gold mined and pro­duced in the coun­try. He fore­saw a fi­nite min­eral and na­tional wealth, back­ing the Philip­pine peso and econ­omy. Prospec­tively, it would be a safety net against what was al­ready back then, in­creas­ing signs of com­pet­i­tive trade and com­merce in to­day’s phe­nom­e­non of glob­al­iza­tion. The economies, mar­kets, in­vest­ments, etc., of the world in­ter-con­nected, with Asian fi­nan­cial cri­sis and hy­per­in­fla­tion par­tic­u­larly in a world un­der a “fiat cur­rency,” highly prob­a­ble in the not so dis­tant fu­ture?

Gold is gen­er­ally a de­sir­able means of ex­change (con­vert­ible to any cur­rency) to barter for po­lit­i­cal and eco­nomic ad­van­tages. My father saw gold as a sec­ondary re­serve, in case in­ter­na­tional cur­ren­cies, went south. Cen­tral Bank of­fi­cials (fore­run­ner to the Bangko Sen­tral ng Pilip­inas) were luke­warm to the idea. World gold prices were sta­ble and as a com­mod­ity, less pro­found as paper cur­ren­cies.

Philip­pine gold be­came an “emer­gency cur­rency” in the ’70s dur­ing the en­ergy/gaso­line cri­sis. Ac­cord­ing to for­mer First Lady Imelda Mar­cos, tra­di­tional petroleum sup­pli­ers from the Mid­dle East were pres­sured not to sell Arab oil to the coun­try. In our con­ver­sa­tion with Mrs. Mar­cos, she de­scribed her spe­cial travel abroad to ap­peal be­fore the king of this oil-rich na­tion. Ini­tially de­clined by her host, she re­torted, “Oh but your Royal High­ness, we will not pay you in dol­lars, but in gold.” The deal was struck.

To­day, cen­tral banks of dif­fer­ent coun­tries are boost­ing their re­spec­tive gold hold­ings.

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