The black market for gold in the Philippines
This Southeast Asian country lies in the Western Pacific Ocean comprising over 7000 islands. Its fascinating culture is influenced by the US and Spanish colonialism. This place is an abode for more than 100 million people who follow Roman Catholic as their religion. Plenty of housing styles are offered by renting apartments to rural farmhouses. As compared to a rural place, rent is higher in an urban area and the availability of housing is also scarce. The best way to find secured accommodation is through the reference of a friend or a colleague.
Despite a strong economy, the Philippines faces a huge national debt with a high rate of poverty. The country is dependent on its overseas workers. The government is still in a procedure of creating incentives and job opportunities for people to start working in their own country. In 2013 a violent typhoon hit this place causing a huge loss of human lives and as well as the infrastructure in the western part. After this event, the GDP has faced a down strike but still, the economy is consistently growing to cope with the storm damages.
The Philippines is bestowed with colossal minerals, so in rich that every individual can make a superior living by illegal mining. Like other places, the government of this country continues to pass laws and taxes in order to secure their ‘fair share’ from the sweat of other people related especially with the mining projects. According to a standard law, all the gold and silver produced should be sold to the central bank, the Bangko Sentral. 7% of tax was levied on all precious metals last year, which enforced the small-scale producers to smuggle the minerals illegally. According to a report of an Assistant of refinery operations of the Central bank, 95% of gold is mined out of the country and is illegally smuggled. This trend is accelerating at a great speed, the purchases done by the bank has dropped from 4% to 88% and is still staggering. This smuggled gold finds its way from Hong Kong and then to China, where there is a vicious demand for gold, despite its peaking prices.
Of course, it is completely legal to bring a tax-free gold to Hong Kong and this is the reason that reports of Hong Kong show 30 times higher gold imports then what Philippines government reports the gold exports to Hong Kong. Although, a trade-related gold shipment is to be registered with authorities there are no restrictions on gold carried by the passengers. Thus, this discrepancy is a clear indication of a massive amount of gold being smuggled out of the country.
The ‘ninja miners’ of the Mongolia region had to use crude methods of mining and smuggling gold to China to avoid the taxes and customs of government. They are so-called because they carry large green pans on their backs that resemble a turtle shell. The smuggling of gold increased so much so in the Sierra Leone region the government had to slash down the mining tax for small-scale producers. In the Southern Philippines, there is a large scale of illegal gold mining done, where earning money and a good lifestyle is easier than a daily wage worker in Manila. The Philippines is the world’s 18th largest gold miner, which produces over one million troy ounces gold every year worth $1.6 billion. As the black market is tax-free, all the small-scale producers have turned their way to illegal smuggling rather than selling it to their central bank. The governor of the Southern region has reported that most of the black marketing for gold is done in the capital of the Philippines, Manila. Moreover, the foreign gold buyers are continuously driving into the country to buy the precious gold in the black market. They convert this gold into small nuggets or sheets so that they can import it conveniently. This ‘hand-carried smuggling’ is a major reason for an enormous gold outflow. Therefore, with most of the gold being smuggled out illegally, the country is losing its cheapest source of gold reserves.