Did Marcos rope the BSP into his ‘insertions’ scheme?
THE Bangko Sentral ng Pilipinas’ (BSP) extraordinary 2024 gold sales and its record profits and dividends remitted to the government provide strong circumstantial grounds to ask whether the central bank was effectively roped into President Ferdinand Marcos Jr. and former speaker Martin Romualdez’s plot to steal billions of pesos through kickbacks from flood control projects.
The starting point is the sheer scale and timing of the BSP’s gold disposals. In the first half of 2024, the Philippines emerged as the single biggest central-bank seller of gold in the world, unloading roughly 24.9 to 25 tons and slashing the share of gold in its reserves when most central banks were still net buyers. This was not a minor portfolio tweak but a sharp, contrarian move executed during a period that quickly turned into a powerful gold bull run, with prices setting repeated record highs after the bulk of the BSP’s sales had already gone through.
The central bank defended this as “active management” to lock in gains and rebalance its reserve mix which, on its face, is a technically defensible rationale. But the global context undermines the innocence of the timing: When nearly every other monetary authority in the world was buying gold for insurance and de‑dollarization reasons, the Philippines chose to cash out aggressively, narrowing its stock of hard assets just as geopolitical and financial risks were rising.
Whatever the internal rationale, the financial consequence is clear: The BSP’s 2024 net income blew past historical norms, reaching well over P100 billion and setting a post‑1993 record. Coverage and analyst commentary explicitly connect this profit surge to two factors: a step‑up in interest income from international reserves as global rates stayed elevated, and sizable realized gains from selling gold that had been acquired at much lower historical prices.
Gains
The BSP does not report its gold sales for any year in its published income statement, so outsiders cannot compute an exact peso figure for the profit on these sales alone. Yet the rough timing is hard to ignore: an institution that had posted modest profits or even small losses in some of the preceding years suddenly reports a windfall in the precise year it dumps tens of tons of bullion into a rising market. Technically, the 2024 profit might would still have been positive without the gold trades, but gold clearly amplified earnings and pushed the headline number into record territory.
Under the GOCC Dividend Law, at least half of the BSP’s net earnings are supposed to flow into the national government, unless the president authorizes a lower remittance rate. In practice, this has turned the central bank into an increasingly important source of non-tax revenue, alongside other state‑run financial institutions whose own record profits have been loudly celebrated by the Department of Finance as funding for “priority infrastructure and socioeconomic programs” under Marcos.
For 2024, that structure means the BSP’s unusual gold‑boosted profit directly translated into a much larger dividend space for the Treasury. The DoF has been explicit that rising GOCC dividends are used to bankroll the administration’s infrastructure projects intended mainly to generate kickbacks from complicit infrastructure contractors.
There is a convergence of patterns that, taken together, make the central bank’s 2024 behavior suspicious.
First, the timing: The BSP executes the largest official‑sector gold sale in the world just as the Marcos government ramps up infrastructure spending, including on what are now widely alleged to be deeply corrupted flood control lines. Second, the fiscal architecture: Those gold‑related profits automatically enlarge the BSP’s dividend remittances, directly augmenting the same non‑tax revenue pool that Malacañang and the DoF tout as a way to finance “priority projects” without tax hikes. Third, the opacity: Gold‑trade profits are buried in aggregated income lines, BSP’s reserve‑management rationale is couched in bland technocratic language, and there is no transparent tracing of exactly how much of the incremental dividend take was effectively recycled into the flood control envelope now under fire.
Against this backdrop, it would not be reckless to pose the question framed in political, not yet prosecutorial, terms: Was the BSP, willingly or not, folded into a de facto funding architecture that underwrote a massive, leakage‑ridden infrastructure spree? Once the central bank agrees to convert long‑term strategic gold holdings into cash profits, knowing that under the law half of that surplus would be siphoned off to the Treasury, it becomes, in substance, part of the fiscal machine — and in a system where that machine is demonstrably feeding ghost projects, the line between “independent reserve manager” and “silent enabler” blurs.
Questions
The BSP must answer important questions. Did the BSP’s Monetary Board explicitly discuss and quantify the dividend and fiscal implications of the 2024 gold sales, and were these considerations communicated to, or requested by, the economic managers in Malacañang? Did anyone at the DoF or the Office of the President push, formally or informally, for an “aggressive” realization of gains to engineer a dividend windfall in time for politically sensitive budget cycles?
Equally crucial is the demand for granular transparency: the BSP should be pressed to disclose, at the minimum, an audited breakdown of 2024 income by major asset class, including realized gains from gold sales, and the DoF and the Treasury should be compelled to map out where every incremental peso of BSP dividends actually went into the expenditure program. In a setting where hundreds of billions of pesos in flood‑control appropriations are now under suspicion, any refusal to open these books will only deepen the perception that the central bank’s vaults were quietly mobilized to grease the wheels of plunder.
Technocracy
In the end, a central bank cannot hide forever behind the fiction that it is an apolitical technocracy floating above the muck of patronage politics. When its balance sheet is actively mined to feed a presidency that presides over ghost projects and contractor cartels, it becomes fair — even necessary — to argue that the Bangko Sentral may not just be an innocent bystander in the Marcos regime infrastructure scandal, but a structural participant whose 2024 gold gamble made the looting easier to finance.
There is one crucial detail that strengthens this columnist’s suspicions. One crucial requirement for the unprogrammed allocations, many of which were covertly inserted into the 2025 budget to fund ghost or ill-constructed flood projects, to be actually implemented is for unexpected programmed revenues to emerge.
The sudden increase in BSP dividends, due to the sale of its gold reserves when the prices of the metal were low, certainly fits that requirement.
There may have also been a more malicious motive for the BSP’s gold sales, that it was a case of hitting two birds with one stone.
Whistleblower Zaldy Co has alleged that his immediate boss, the the House Speaker Martin Romualdez was the architect of the billions of pesos in kickbacks from the flood-control projects, which he himself delivered to him in a hundred suitcases.
The big question is, how could so much cash have been squirreled into our banking system. It most probably wasn’t.
The BSP’s gold sales not only gave the Treasury the leeway to fund such projects. It is through gold purchase by international banks — which it can retail to any entity — that the huge kickbacks may have been brought out of the country. I have to double-check who owns Benguet Corp., the county’s longtime third largest gold producer.
NOTE: I emailed BSP governor Eli Remolona last week a draft of this column for him to comment. His communications officer Coco Alcuaz vibered me the BSP’s official reply:
“Connecting the BSP to the current controversy in the national government is baseless because we fiercely defend our fiscal autonomy in order to pursue effective monetary policy.
We sell gold when prices rise in order to rebalance its proportion in our total portfolio. Gold is a small part of our reserves and every time we sell, the proceeds go back to total reserves in the form of other assets. For rebalancing purposes, we have sold gold since 2020 after gold started its still ongoing climb, including, in 2021, an amount close to our 2024 sales.”
Facebook: Rigoberto Tiglao
X: @bobitiglao
Website: www.rigobertotiglao.com
The post Did Marcos rope the BSP into his ‘insertions’ scheme? first appeared on Rigoberto Tiglao.
Did Marcos rope the BSP into his ‘insertions’ scheme?
Source: Breaking News PH
No comments: