DAVAO CITY—Small-scale miners appear to live on double-edged sword of survival: escaping government taxes just to end up getting shortchanged in the black market.
The scam usually comes in the form of lower buying rate for gold, said Deputy Governor Diwa Guinigundo of the Bangko Sentral ng Pilipinas (BSP).
Black market traders commonly earn through the margin of their buying rate, which must be lower, to that of the prevailing market price.
“The small miners often get shortchanged by the rate dictated by the black market, which peg the price from the world market price,” he said.
Unfortunately, Guinigundo said the world-market price changes frequently to the detriment of the small miners, since the offers they get are too low “as compared to the buying price of the BSP, which really peg them at the actual world market price.”
Small miners began to shun the official BSP buying stations in Baguio, Naga, Davao and Zamboanga after the Bureau of Internal Revenue enforced the collection of 2-percent excise tax and 5-percent withholding tax in 2011.
Collection dropped sharply immediately to as low as 5 percent of what it used to buy in 2010. He said the BSP used to buy as much as P51 billion from the small-scale miners up to the first semester of 2011.
At this amount of gold bought, the Philippines was able to add $1.2 billion to $1.3 billion to the gold reserves annually. After the drop in buying, “I think we are able produce two or three bullions each month only.” Each bullion weighs 12 kilos.
Guinigundo has suggested to the government to amend the exaction of taxes “if government was already unable to acquire gold anyway.”
“The amendment should exempt small-scale gold miners and sellers from these two taxes,” he said. He said the BSP was coordinating with lawmakers to enact the amendment to the law.
He said there was no clear tract on where the gold from the small-mining areas, except strong indication that small miners have sought the black market through the southern backdoor—referring to Zamboanga and the three southwestern island provinces of Basilan, Sulu and Tawi-Tawi—that is known to be porous and lightly guarded.
Others were being sold to ambulant buyers, who, Guinigundo said, have already included those with signboards that say: “We buy all kinds of gold.”