Central Bank GOLD Rules

These are the provisions given by the Central Bank of the Philippines to all who aspire to become a Gold Investor--

CHAPTER IX

Gold Transactions

SECTION 100. Authority of the Central Bank. — The Central Bank, pursuant to the provisions of Section 72 of R.A. 265, as amended, is authorized to buy and sell gold.

SECTION 101. Definition of Terms.

1. "Primary Gold" — gold produced directly from its ore, marketable in its primary form. For purposes of this regulation, primary gold shall refer to gold produced by primary gold producers;
2. Primary Gold Producer" — entity duly registered with the Securities and Exchange Commission (SEC) which has for its primary purpose production/mining of gold and classified by the Bureau of Mines as a primary gold producer;
3. "Secondary Gold" — gold produced from alteration of a primary mineral like copper, or gold as by-product of copper and other ores;
4. "Secondary Gold Producer" — entity duly registered with the SEC which produces gold resulting from alteration of a primary mineral like copper, or producer of copper or other minerals with gold and silver as by-products;
5. "Small-Scale Mining" — mining activities which rely heavily on manual labor using simple implements and methods and do not use explosives or heavy mining equipment as defined by R.A. 7076 approved 27 June 1991. This shall include gold panning;
6. "Small-Scale Miner" — a Filipino citizen who, individually or in the company of other Filipino citizens, voluntarily forms a cooperative duly licensed by the Department of Environment and Natural Resources (DENR) to engage in small-scale mining as defined herein. This shall include gold panners;
7. "Gold Buying Price" — Central Bank's buying price using the prevailing international market buying price for gold, multiplied by Central Bank's buying rate for US dollars against pesos on the date of purchase;
8. "Gold Selling Price" — Central Bank's selling price using the prevailing international market selling price for gold, multiplied by Central Bank's selling rate for US dollars against pesos on the date of sale.

SECTION 102. Sale of Gold.

1. "Primary gold" — All primary gold shall be delivered and sold by the owner or producer thereof to Central Bank;
   
2. "Secondary Gold" — Gold obtained as by-product of mineral concentrates, ores, matte, slime and precipitates may be exported abroad for smelting and sale. The dollar proceeds from such sales shall be sold to Central Bank through the seller's authorized agent bank which shall credit the proceeds to Central Bank's designated account with a foreign bank within 24 hours from receipt of said proceeds.
   
   Locally-smelted secondary gold shall be delivered and sold to Central Bank;
   
3. "Gold from Small-Scale Miners" — All gold produced by small-scale miners in any mineral area shall be sold to Central Bank;
   
4. "Gold in other forms" — Gold in forms other than any of the above may be sold to Central Bank.

SECTION 103. Purchase of Gold by Central Bank.

1. "Primary Gold" — Central Bank shall purchase gold from all primary gold producers at the gold buying price and shall prescribe and collect refining, assaying, storage, and other charges.
   
   The seller will initially be paid 100% of the estimated gold content of the gold delivered and sold to Central Bank. If the gold producer's average gold assay during any one quarter is found to have been overstated by 0.2% or more, the initial payment for gold deliveries during the succeeding quarter shall not exceed 90%. The remaining 10% shall be paid after completion of the final assay;
   
2. "Gold from Small-Scale Mining" — Central Bank shall purchase gold produced by small-scale miners at the gold buying price. Corresponding refining, assaying, storage and other such charges shall likewise be prescribed and collected for such purchases. Central Bank may pay commissions/handling fees on such gold purchases, as may be warranted.
   
   The seller will initially be paid 95% of the estimated gold content of the gold delivered and sold to Central Bank. The remaining 5% shall be paid after completion of the final assay;
   
3. "Gold in other forms" — All other gold offered for sale to Central Bank may be purchased under the same guidelines as (b) above.

SECTION 104. Repurchase/Resale Option.

1. Within one hundred eighty (180) days from original sale to Central Bank, primary gold producers shall be given the option to repurchase and sell back the gold to Central Bank. The repurchase price shall be one-half of the sum of the Original Sale Price, the Accumulated Interest and the Final Sale Price.
   
   Accumulated Interest shall be computed at an interest rate to be determined by Central Bank. The Final Sale Price shall be the gold buying price on the date of resale;
   
2. Small-scale miners shall be given one option to avail of a higher price of gold within ten (10) working days from the day of delivery using the gold buying price on that day as basis for the final payment.

SECTION 105. Sale of Gold Grains/Pellets. — The following shall govern Central Banks sale of gold grains/pellets to jewelry manufacturers and other industrial users:

1. Application to buy gold shall be filed with Central Bank in the prescribed form;
2. Central Bank shall sell gold at the gold selling price plus a service fee to cover cost including cost of conversion and packaging of gold grains or pellets;
3. The gold purchaser shall submit to Central Bank a quarterly report of production output and gold inventory within fifteen (15) days after the end of the quarter.

SECTION 106. Purchases/Sales by the Private Sector. — Except as provided for in this Circular, purchases and sales of gold and/or gold-bearing metals in the Philippines may be made by and between Philippine residents without specific approval from Central Bank.

Banks may buy and sell gold in the international free gold market, subject to prior Central Bank approval.

SECTION 107. Export of Gold.

1. No person shall export or bring out, or attempt to export or bring out of the Philippines, gold and/or gold-bearing materials, in any shape, form and quantity without prior approval from the Central Bank Export Department;
2. This requirement shall not apply to the following:
   
   1. Gold forming an integral or necessary part of one's personal effects or of items intended as gifts or souvenirs provided that such personal effects or gifts or souvenir items shall not be brought out in commercial quantities;
   2. Gold brought in by tourists and non-residents, provided that the entry or importation thereof in the country is properly declared in the Held-Baggage Receipt Form of the Bureau of Customs;
   3. Secondary gold exported under Section 102 (b) hereof; and
   4. Jewelry.
   
3. All gold sold to Central Bank by primary and secondary gold producers and small-scale miners are considered constructive exports and are entitled to rediscounting when appropriate.

SECTION 108. Import of Gold.

1. Any entity or individual desiring to import gold and/or gold-bearing materials, excluding jewelry, shall secure an import authority from the Central Bank Current Import and Commodity Classification Department (CICCD);
2. This requirement shall not apply to the following:
   
   1. Importations of gold-bearing materials which form part of one's personal effects and are not in commercial quantities, or which are exempt from the Central Bank release certificate requirement pursuant to Sec. 26 of Circular No. 1029; and
   2. Importations of gold-bearing materials for artistic, dental or industrial use through letters of credit (L/Cs) opened with local commercial banks by domestic or export producers and dental laboratories/establishments.

SECTION 109. Gold Forwarding Hedging. — Any contract covering gold forward hedging entered into by a primary gold producer with a financial institution or metals trader shall be subject to prior Central Bank approval and submission of its latest gold statistical report.

The Central Bank approval for third party gold transactions, if so secured, shall not relieve the primary gold producer from its obligation to have its primary gold production refined and sold to MGRD