LISTED OCEANAGOLD (Philippines), Inc. (OGP) has renewed its gold-buying agreement with the Bangko Sentral ng Pilipinas (BSP) for another three years.
Under the agreement, which was renewed in March and will run until March 2028, OGP is required to offer for purchase no less than 25% of its annual gold dor茅 production 鈥 an alloy or solid mixture of gold and other metals such as silver 鈥 to the BSP.
The initial agreement between OGP and the BSP was executed in May 2022.
In 2024, OGP sold a total of 6,628 ounces of gold dor茅 鈥 or 29% of its gold dor茅 output 鈥 to the BSP. Of this, 5,356 ounces were sold under the BSP鈥檚 gold-buying guidelines after the expiration of the previous purchase agreement in May 2024, the company said.
OGP sold 9,045 and 12,865 ounces 鈥 or 28% and 27%, respectively 鈥 of its gold dor茅 production to the BSP in 2022 and 2023.
The central bank uses its gross international reserves, including gold, to manage foreign exchange liquidity and market stability.
In February, the BSP said that, like other central banks, it maintains a portion of its reserves in gold primarily to hedge against market volatility in other reserve assets.
鈥淕old prices tend to move in the opposite direction of other assets. Therefore, central banks hold some gold as a hedge against price declines in other assets in the reserves,鈥 it said.
鈥淗owever, gold can be volatile, earn little interest, and entail storage costs, so central banks don鈥檛 want to hold too much.鈥
Data from the BSP showed that its gross international reserves reached US$107.9 billion as of end-August 2024, up from US$103.8 billion as of end-December 2023 鈥 equivalent to 7.8 months鈥 worth of imports of goods and payments for services and primary income.
The figure also represents about 6.0 times the country鈥檚 short-term external debt based on original maturity, and 3.8 times based on residual maturity. 鈥 Kyle Aristophere T. Atienza
