Philippines' black market is China's golden connection

pmbug

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Up to 90 percent of small-scale Philippine gold production is being smuggled out of the Southeast Asian country, according to estimates from officials and traders, much of it to China.

The potential revenue being lost is considerable: The Philippines, the world's 18th largest gold miner, produced just over 1 million troy ounces of gold in 2011, worth $1.6 billion at current prices. About 56 percent of that came from small-scale miners, data from the Bureau of Mines showed.

A top central bank official told Reuters new taxes on gold sales imposed last year appear to be a key factor in the alarming rise in gold smuggling. But the head of the revenue agency said in an interview the 7 percent tax on gold sales will not be rolled back and suggested better policing of the borders instead.

The Customs Department, however, told Reuters the problem has become so overwhelming it can do little about the smuggling of gold and other minerals out of the archipelago of more than 7,100 islands.

SMUGGLED TO HONG KONG

"All the production of small-scale mines, almost all, now goes to the black market, because there is no tax in the black market," said Rex Banggawan, an accountant for a small-scale mining cooperative that buys and sells gold in the mountain city of Baguio in northern Philippines. "After that, smuggling is automatic."

Arthur Uy, who looks after Mount Diwata as governor of Compostela Valley province in southern Philippines, the top small-scale gold mining province in the Philippines, said the black market in gold is mainly based in the capital, Manila.

"Most of the gold is being smuggled out to Hong Kong, that's the biggest market," said Uy, a two-term governor whose family of Chinese descent partly owns one of the four most productive small-scale mines on Mount Diwata.

Both Uy and Banggawan estimated 90 percent of the gold produced by small-scale miners is going into the black market.

Official data reflects those estimates.

The amount of gold sold by small-scale miners and traders to the Philippine central bank in the second quarter plunged 98 percent from a year earlier, according to the latest government data. By law, all gold produced by miners such as Mulato in the Philippines should be sold to the central bank at around world market prices.
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More: http://www.reuters.com/article/2012/08/23/us-philippines-gold-idUSBRE87M02120120823

:noevil:
 

bushi

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this is just too funny. Official sales by small miners have plunged 98% y/y (read: production "ceased" to exist overnight), and nobody in the relevant govt offices rises a brow :rotflmbo: But of course, there's no corruption and bribes going from these small miners into the "controllers" hands, either.
 

Jay

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My wifes' father was a gold mine assayer in Mindanoa (where I bought my land). I can see this. of course, it's illegal to own a gun in the Philippines also (everyone I know has one). Good find. And I was thinking everything in the Philippines is sold in one day supplies; now I see (in adjoining thread) this third worldliness is spreading to Europe. Oh, the horror.... :)
 
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