BSP chief defends gold sale amid rising prices

Bangko Sentral ng Pilipinas Governor Eli Remolona Jr. addressed concerns over the central bank's decision to sell a portion of its gold reserves, explaining that the move was based on sound portfolio management rather than speculative trading.

- Michael Varcas

"Gold as an asset...It's a very poor investment. It's risky," Remolona said, adding that the average returns come out negative due to custody fees.

He also said that the BSP's gold reserves, stored mainly in the Bank of England, incur storage costs.

"The market is there, but gold is highly volatile," the BSP chief said.

While acknowledging gold's instability, Remolona said that it could serve as a useful hedge when held as part of a larger portfolio, particularly one heavily reliant on dollar assets like the BSP's.

"Gold prices recently rose, pushing our holdings above the ideal ratio of eight to 10 percent (to total reserves), so we sold some," he said.