Gold: Regulation, Taxation, and the BSP

As of 2026-08-30 · Updated 2026-08-30 · Section: Mineral Resources · 日本語版

The debate over gold in the Philippines is not about "geology" — it is about "regulatory systems." Who may hold mining rights (the Mining Act), how much the government takes (the fiscal regime), and where mined gold must be sold (BSP purchasing) — these three layers are governed by entirely separate laws that do not line up with each other. In September 2025, the fiscal regime for large-scale metallic mining was rewritten for the first time in 30 years (RA 12253). At the same time, the price of gold is at an all-time high. 2025–2026 is the moment these two facts collided.

0. 注 Three common errors to correct up front

This topic attracts an unusually large amount of misinformation, in both Japanese and English. Let's clear these up first.

1. Sorting out terminology — endowment, resources, and reserves are not the same thing

Skip this distinction and everything that follows loses its meaning.

注 The English term "gold reserves" can mean either "reserves in the ground" or "bullion held by the central bank." When you read an article saying "the Philippines' gold reserves are X tons," always check which one is meant. The "world's 2nd-largest" myth mentioned above has spread largely because of exactly this conflation.

The "grading" of numbers — which standard?

The Philippine Statistics Authority (PSA)'s mineral asset accounts — the government's official "reserves"

The PSA publishes annual asset accounts for gold, copper, nickel, and chromite based on the UN's SEEA/UNFC-2009 framework. There are three classes.

• Class A = commercially recoverable resources — only this class is assigned a monetary value
• Class B = potentially commercially recoverable
• Class C = non-commercial and other known deposits

Source: PSA Environmental Economic Accounts (published 25 June 2026) / Technical Notes

注 (Corrected in the 2026-08-25 cross-check) This article previously gave the 2024 figure as 357,110 kg and described 2025 as "▲5%," but 357,110 → 371,260 is not a ▲5% change — it is +4.0%, an internal inconsistency. The PSA subsequently revised the 2024 figure upward to 390,530 kg, and 371,260 kg only works out to ▲4.9% on the revised base. The field article "Gold Reserves and Deposits," Section 3-2, uses the revised figure of 390.53 thousand kg and states "▲4.9%," which is the consistent version. Both the initial and revised figures are retained here, but year-on-year comparisons must always use the revised figure. The 2023 mined volume has likewise been standardized from "around 21,860 kg" to 21,850 kg (matching Section 3-2 above) — 21,850 is the figure consistent with the ▲8.0% change to 20,110 kg.

This table is the core of this article. The quantity has fallen for three straight years, while the value has risen 41–45%. What increased was not the gold — it was the gold price. The valuation of metallic mineral reserves overall also rose 17% in 2025 to roughly ₱590 billion, for the same reason.

注 Whenever you see a headline about "the Philippines' gold reserve value surging," first separate whether the quantity rose or the price rose. In 2025 it was entirely the latter.

2. The framework of the Mining Act (RA 7942)

2-1. The constitutional framework

The starting point is Article XII, Section 2 of the 1987 Constitution.

• Mineral resources are owned by the State. Exploration, development, and utilization are carried out under the full control and supervision of the State.
• The State may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations at least 60% Filipino-owned.
• As an exception, for large-scale exploration, development, and utilization, the President may enter into agreements for "financial or technical assistance" with foreign-owned corporations.

This "exception" was given concrete form in the Philippine Mining Act of 1995 (RA 7942), signed by President Ramos in March 1995.

2-2. MPSA vs. FTAA — the most important distinction

There is also an Exploration Permit (Section 26), which converts to an MPSA or FTAA depending on exploration results.

注 "Philippine mining is capped at 40% foreign ownership" is inaccurate. Under an FTAA, up to 100% foreign ownership is possible — an exception written into the Constitution itself. In practice, MPSAs are more common because (1) the minimum capital requirement is lower and (2) they don't require presidential approval, making the process faster. In other words, the real constraint on foreign investment is less a "legal wall" than "procedural cost."

The constitutionality of the FTAA was contested in La Bugal-B'laan Tribal Association v. Ramos (G.R. No. 127882). The Supreme Court initially struck it down as unconstitutional in January 2004, then reversed itself on reconsideration in December of the same year, upholding it as constitutional. This reversal is the legal foundation for foreign participation in Philippine mining.

The flagship example of an FTAA is OceanaGold's Didipio Mine. A gold-copper mine straddling Nueva Vizcaya and Quirino provinces, it was shut down for two years after provincial governors set up barricades following the FTAA's expiration in 2019. On 14 July 2021, it was renewed for 25 years retroactive to 19 June 2019 (i.e., until 2044). The amended terms on renewal were: (1) an additional 1.5% of gross revenue contributed to local development, (2) net smelter return (NSR) made a deductible item, split 60% government / 40% company, and (3) at least 10% of OceanaGold Philippines shares to be listed on the PSE within three years.

2-3. Other legal layers

3. Timeline of bans and lifts — 2012 to 2026

 March 1995     Mining Act (RA 7942) enacted. Establishes the MPSA / FTAA framework

 December 2004  Supreme Court, on reconsideration, upholds the FTAA as constitutional (La Bugal-B'laan)

6 July 2012    President Aquino signs Executive Order No. 79 (EO 79) (published 9 July)
                 ・Section 4: "No new mineral agreements shall be entered into until
                   a new law rationalizing revenue sharing takes effect" = a de facto moratorium
                 ・Issuance of exploration permits continues (grants first right to
                   develop once the new law is enacted)
                 ・Adds 78 tourism sites, prime agricultural land, and marine protected
                   areas as "no-go zones"
                 ・Confines small-scale mining to Minahang Bayan, bans mercury use
                 ・Creates the Mining Industry Coordinating Council (MICC)
                 注 In the end, the envisioned "new revenue-sharing law" took 9 years to pass

April 2017     Environment Secretary Lopez signs DAO 2017-10 = bans open-pit mining nationwide
                 Rationale: "open-pit mines remain a permanent liability"
                 Effect: halts the Tampakan copper-gold mine, Kingking copper-gold mine, and others

 May 2017       Secretary Lopez leaves office after the Commission on Appointments declines to confirm him

14 April 2021  President Duterte signs EO 130
                 → Amends Section 4 of EO 79, lifting the 9-year moratorium
                 注Does not touch the open-pit mining ban

 8 August 2021  DAO 2021-25, EO 130's implementing rules, is issued
                 注 The clause in draft Section 11 repealing DAO 2017-10 was removed

23 December 2021  Environment Secretary Cimatu signs DAO 2021-40
                 → Formally repeals the open-pit mining ban (DAO 2017-10)
                 Covers: copper, gold, silver, and polymetallic ores
                 Rationale: "best management practices and technologies now exist to avoid and manage adverse impacts"

4 September 2025  President Marcos signs RA 12253 (Enhanced Fiscal Regime for Large-Scale Metallic Mining Act)
                 → The "new revenue-sharing law" that EO 79 had waited 9 years for is finally enacted

 18 December 2025  The Department of Finance (DOF) issues the implementing rules (IRR) for RA 12253
 20 December 2025  IRR published and takes effect
17 February 2026  Application to large-scale mining operators begins (150 days after effectivity)

21 August 2026  President Marcos signs EO 122
                 → Establishes a national policy framework for critical minerals, restructures the MICC
                 Co-chaired by DENR and DOF; streamlines permitting, promotes domestic processing and value-addition

4. The mining fiscal reform (RA 12253) — the 2025 turning point

4-1. Basic facts

4-2. Royalties — entirely different inside vs. outside mineral reservations

The 5-tier margin-based royalty outside reservations (margin = mining income ÷ gross output)

When the margin is zero or negative, a minimum royalty of 0.1% of gross output (one-tenth of 1%) applies.

注 Some articles write this "minimum 0.1%" as "0.01%" (e.g., in Grant Thornton–style explainers). The statutory text reads "one-tenth (1/10) of one percent" = 0.1%.

4-3. The Windfall Profits Tax — aimed squarely at gold price surges

Levied on net income from metallic mining, in addition to the royalty, whenever the margin reaches 30% or above. Five tiers.

This tax cannot be deducted from taxable income (stated explicitly in the law). The Optional Standard Deduction (OSD) cannot be used in calculating windfall profits, though corporate income tax and royalty payments remain deductible in computing net income.

The intent of the design is clear: it exists so the government can capture a "windfall" when commodity prices spike. Given that gold has repeatedly hit record highs in 2025–2026, gold mines are first in line to be caught by this net.

4-4. Anti-avoidance measures — ring-fencing and thin capitalization rules

4-5. The overall tax picture

Revenue sharing: 40% of total royalty, excise-tax, and similar collections go to the host LGU (remitted immediately, with no national withholding or garnishment). At least 10% of royalties fund exploration, laboratory, and capacity-building activities of the MGB and the Metals Industry Research and Development Center (MIRDC).

Payment mechanics: Royalties are declared and paid to the BIR quarterly, within 60 days of the end of each calendar quarter. A bond equal to the estimated quarterly royalty must be posted, with any shortfall or excess reconciled annually.

注 Relationship with existing MPSAs / FTAAs: RA 12253 is said to provide legal stability for existing agreements, but 注the details of how the FTAA's "Additional Government Share (AGS)" reconciles with the new royalty and windfall profits tax remain partly pending further BIR circulars (as of August 2026). BIR guidance on filing forms for the new taxes and the scope of confidentiality-waiver provisions is also still forthcoming.

5. The BSP (Bangko Sentral ng Pilipinas)'s gold-purchasing system

5-1. The framework

The BSP is the sole institution in the Philippines authorized to buy gold from mines and export it. Its basis includes RA 7076 (People's Small-Scale Mining Act, 1991), among others. The gold it buys is refined at its own smelting/refinery plant into a form accepted on the international bullion market.

The BSP's refinery began operating in 1977 and received LBMA Good Delivery accreditation in September 1979. It is the only central bank in the world that operates its own LBMA-accredited refinery. The BSP has established a "Responsible Gold Sourcing Policy" and maintains governance aligned with LBMA's responsible gold guidance (a global forum on ASGM was held in Batangas on 3–5 June 2024, at which LBMA's ASGM toolkit was released).

5-2. RA 11256 (2019) — removing the tax to win back gold from smugglers

Content

1. Exclusion from gross income (amending Section 32): exempts from tax the income from (1) sales of gold to the BSP by registered small-scale miners (as defined under RA 7076) and accredited traders, and (2) sales by small-scale miners to accredited traders (ultimately sold on to the BSP).
2. Excise tax exemption (amending Section 151): exempts gold sold (or eventually sold) to the BSP from excise tax. Anyone who already paid excise tax before the sale may claim a refund or tax credit from the BIR.
3. Section 4: presumption of origin — gold sold to the BSP by an accredited trader is presumed to have been purchased from a small-scale miner (shifting the burden of proof).
4. Accreditation is granted through a certificate issued by the BSP (valid for 3 years). Requirements include a Tax Identification Number (TIN) and a valid small-scale mining contract.

Legislative rationale (bill explanatory notes)

注 This is the heart of the system.

  2010    BSP's domestic gold purchases = over 900,000 troy ounces
          (some sources cite 28.56 tons)

July 2011   The BIR begins enforcing taxation on gold sales (2% excise tax
          + 5% withholding tax = 7% total) in earnest,
          under Revenue Regulations RR 7-2008

  2018    BSP's purchase volume = 0.33 tons
2019    BSP's purchase volume = 10,207 troy ounces
          = ▲99% versus 2010

  ─── Why? Because the black market pays more. ────

March 2019  RA 11256 enacted (removing the tax)
2020    BSP's purchase volume = 115,800 troy ounces (approx. 3,601.78 kg)
          = roughly 11x the prior year (the BSP describes it as "roughly a 1,000% increase")

Sources: statements by the head of the BSP's Mint and Refinery Operations Department (MROD), and reporting by GMA News / Inquirer / PNA / Philstar; RA 11256's legislative rationale.

The lesson is unmistakable. A 7% tax pushed more than 90% of the country's gold into the underground economy. The moment the tax was removed, volumes rebounded elevenfold in a single year. This is one of the clearest cause-and-effect episodes in Philippine tax policy history.

注 That said, this did not "solve" the problem. The 2020 figure of 115,800 troy ounces is still only just over 10% of the more-than-900,000 troy ounces recorded in 2010.

5-3. 注 Friction the system still faces

Even after RA 11256, reports indicate that many small-scale miners in Baguio (Cordillera) continue to choose the black market. The reason is not tax, but procedural cost.

The BSP has responded with (1) improved rates for small-scale miners, (2) reduced fees, (3) faster analysis and payment — matters taken up with the Monetary Board — (4) expanding the accredited-trader system, (5) a plan to use pawnshops as small-scale buying points, and (6) direct sourcing from large-scale mines (a purchase agreement was signed with OceanaGold Philippines in May 2022).

6. Small-scale gold mining (ASGM) — the 500,000 people outside the system

RA 7076's original vision was "a Minahang Bayan in each of the country's 1,637 cities and municipalities." Thirty-four years on, there are 53–63. (Corrected per the 2026-08-25 cross-check — since 53 and 63 coexist depending on the tally, this has been rewritten as a range.) This is the single biggest structural reason why "most of the Philippines' gold never shows up in official statistics."

RA 7076's constraints, and the 2025–2026 reform debate

In November 2025, the TUCP party-list group filed House Bill No. 5840, the "Minahang Bayan Act." Its pillars: simplifying applications and permitting, empowering local mining regulatory boards, and banning hazardous methods such as mercury use. Separately, House Bill No. 9311 (Rep. Eric Yap) was also filed, amending Sections 4 and 8 of RA 7076. At the 7th National Congress of the National Coalition of Small-Scale Miners of the Philippines (NCSSMPI), held 26–28 April 2026 in Sagada, Mountain Province, 59 organizations and over 200 attendees resolved to intensify their push for HB 5840's passage (BusinessMirror 29 April 2026, Pressenza / BAN Toxics reporting).

August 2026 — DAO 2026-08, the "Interim Small-Scale Mining Contract"

In August 2026, the DENR issued Administrative Order DAO 2026-08, establishing a new Interim Small-Scale Mining Contract (ISSMC) system.

As an early application, DENR-MGB Cordillera issued ISSMCs to three groups within the 56-ha Loacan Minahang Bayan in Itogon, Benguet (Antamok Loacan Northwall Miners Association, Shianwart Gold Trading, and Banggawan Gold Ore Miners Association).

What stands out is that "gold must be sold to the BSP only" is now written into the contract itself. Previously, this was true in law but weakly secured contractually. This can be read as the system closing off smuggling routes through contractual terms.

7. Gold smuggling — the gap between statistics and reality

7-1. Evidence of the gap

注 When working with Philippine gold statistics, you will always misread them unless you assume from the outset that "official statistics capture only part of reality."

A structural loophole: Hong Kong customs requires registration for gold entering as a commercial transaction, but imposes no reporting requirement on gold carried in on a traveler's person. Several Philippine international airports have direct flights to Hong Kong, and more than 1,000 seaports offer further routes around the system.

7-2. The situation in 2025–2026

注 It is risky to read "gold export statistics have surged" as "smuggling has declined and formalization has advanced." The rise in value is driven mainly by price increases; on a volume basis, mined output actually fell from 2023 to 2025, as shown by the PSA's asset accounts above. Always separate value from volume when reading these figures.

注 Furthermore, 注no new quantitative estimate of the actual scale of gold smuggling in the Philippines for 2025–2026 could be found (unconfirmed). The commonly cited figures of "79%," "90%," and "95%" are all estimates from 2012–2017, not current numbers. The current ratio should not be stated as established fact.

8. Gold in foreign exchange reserves — 2025–2026

8-1. The numbers

The BSP attributes the July 2026 decline in GIR mainly to its own foreign-exchange operations, foreign-currency drawdowns for the government's external debt repayments, and mark-downs on foreign-currency assets, saying gains on gold and returns on foreign investments cushioned the decline.

注 Notes on reading the data - 注 The World Gold Council's country rankings are sourced from IMF IFS data and lag by two months. What is labeled "2026 ranking" is often actually as of December 2025. - 注 The tonnage has barely moved, while the dollar valuation swings sharply. The drop from $23.057 billion in February 2026 to $19.480 billion in May reflects a fall in the gold price, not a sale. - 注 "Gold's share of GIR" is not a figure the BSP regularly publishes. Most numbers reported in the press are calculated values.

8-2. The internal BSP debate — "shouldn't we be selling by now?"

On 28 October 2025, at the Bloomberg ASEAN Business Summit in Kuala Lumpur, Monetary Board member and former BSP Governor Benjamin Diokno made the following remarks (Bloomberg / Gulf News):

• "Our holdings of gold are already excessive"
• "Shouldn't you sell already?"
• Gold accounts for roughly 13% of GIR — higher than other central banks in the region. The ideal range is 8–12%.
• The BSP's acquisition cost is roughly $2,000 an ounce. The all-time high at the time was around $4,400, with prices then trading around $4,000.

Here is the game-changer: the BSP is sitting on unrealized gains of 2 to 2.5 times its acquisition cost. Whether to "keep accumulating or lock in profits" remained unresolved within the BSP as of August 2026. Governor Eli Remolona has taken the position that "gold alone is a poor investment with negative average returns, but it has value as a hedge within a diversified portfolio."

注 There is a gap between Diokno's "13%" figure (as of September 2025, when GIR was roughly $109.0 billion) and the calculated "roughly 18.4%" for January 2026. The dates and calculation methods differ, so they should not be compared directly.

注 In 2024, the BSP reportedly sold a substantial amount of gold as part of an "active management strategy" (Gulf News, 19 August 2025). The BSP both buys and sells. The simple narrative of "the central bank is hoarding domestically mined gold" is not accurate.

9. How the 2025–2026 gold price surge has affected the system

9-1. Price movements

2025 saw 53 new record highs, with total gold demand exceeding 5,000 tons for the first time and setting a value record of $555 billion (+45% year-on-year) (World Gold Council). Global central banks were net buyers of 1,045 tons in 2024 and 863 tons in 2025.

9-2. How the price surge affected each channel (summary)

注 On item ④: how much the RA 12253 windfall profits tax has actually collected remains undisclosed as of August 2026 (unconfirmed). The DOF's projection of ₱25.08 billion for 2026–2029 is not accompanied by a stated assumption about whether the current gold price level will hold. Avoid definitive statements.

10. A quick-reference for practitioners

11. Issues to watch going forward (as of August 2026)

1. RA 12253's first-year results — application began 17 February 2026. Will the first quarterly royalty filings (due 60 days after each quarter-end) and actual windfall profits tax collections reach the DOF's projected ₱25.08 billion? Some BIR circulars (filing forms, scope of confidentiality waivers) have yet to be issued.
2. The fate of House Bill No. 5840 (the Minahang Bayan Act) — can 500,000 small-scale miners be brought into the formal system? Will DAO 2026-08's interim contracts (2 years, no renewal) actually serve as a bridge to full contracts?
3. The BSP's gold position — "keep accumulating, or lock in profits?" Will sales be executed in line with Diokno's "8–12% is ideal"? GIR falling to an 18-month low ($103.3 billion) in July 2026 could influence that decision.
4. How EO 122 (21 August 2026) is implemented — the national framework for critical minerals and the MICC restructuring (co-chaired by DENR and DOF). Gold is not the centerpiece of "critical minerals," but the drive for streamlined permitting and domestic processing will extend to gold as well. Rep. France Castro of ACT Teachers has criticized it as "handing over mineral resources wholesale to foreign interests."
5. The start of commercial production at Silangan, and Tampakan — Silangan is targeting completion in Q4 2026. Tampakan, 2028. The first major mine to enter commercial production under the Marcos administration is expected to be Silangan.
6. 注The current scale of smuggling — no quantitative estimate exists for 2025–2026. If new investigative reporting or research emerges, Section 7 of this article would need to be substantially rewritten.

12. 注 List of unconfirmed items and points requiring caution

Items that could not be confirmed, or where a definitive statement was avoided, are listed explicitly below.

日本語の詳細版: 分野「鉱業とニッケル」「金の制度・税制・BSP」（本サイト日本語版）。