RP jewelry may finally glitter with gold from Bangko Sentral
Sun.Star, Philippines
THE vision of building a strong fine jewelry industry in the Philippines with better laws and better access to refined gold is starting to glitter.
The special privilege presently enjoyed by the Meycauayan Jewelry Industry Association (MJIA) of buying refined gold from the Bangko Sentral ng Pilipinas (BSP) through a private bank may now be extended to all jewelry makers in the country
The matter has been taken care of after the Guild of Philippine Jewellers appealed to BSP Governor Amando M. Tetangco Jr. and Philippine Exporters Confederation Inc. (Philexport) president Sergio R. Ortiz-Luis, Jr. that the same arrangement between BSP, the Meycauayan jewelry makers and the Philippine Business Bank be expanded to members of the Guild of Philippine Jewellers, Inc.
Under the arrangement, a jewelry manufacturer can buy BSP gold in cash or on credit through the private bank, solving a long standing problem of Philippine jewellers of getting access to locally mined gold raw materials.
Under an old law which is yet to be changed, only the BSP is allowed to buy all the gold and silver produced by local mines and sell the same to local and foreign buyers. The BSP monopoly in domestic gold trade had limited the access to high quality gold by local jewelry makers, who, until the passage of the Jewelry Act of 2004, stayed part of the underground economy. Their supply then was limited to those sold by traders of unrefined gold from small miners, and by importing more expensive yellow metal.
“The guild is now talking with PBB and BSP officials on how it will be done. We have gotten them together after the issue was taken up by the Export Development Council”, revealed Ortiz-Luis.
When pushed through, the Philippine jewellers may even buy their gold in advance and withdraw their purchases as the need arises.
In their letter to Ortiz-Luis, the Guild also asked for representation for them to enjoy the incentive for exporters under the Export Development Act of 1994 of being value-added tax (VAT)-free in their gold purchases from the Bangko Sentral.
They also appealed for the BSP to resume its old practice of buying and selling silver produced by the local mines to further help the jewelry makers, many of them using silver in addition to gold as the main raw material in the manufacture of fine jewelry.
Way back in the early years of the Ramos administration, export leaders and the government had identified fine jewelry manufacturing as one of the domestic industries that could be developed into a billion dollar a year industry.
The challenges then were two-fold, reviving the comatose mining industry and coaching the jewelry makers to surface from the underground economy. This led to the passage into law of the Mining Act of 1994 that replaced the mining law of 1902, and the Jewelry Development Act, in addition to the Export Development Act, the blueprint in making the Philippines an exporting country. The three related laws were passed in 1994.
The idea then was to develop mining and the jewelry industry, link them up and build a strong fine jewelry industry in the Philippines that use locally mined precious and semi-precious metals and stones.
The jewelry industry has since joined the economic mainstream, and from minimal exports, is now one of the 10 top dollar earners for the country. Its growth, however, was slow due to other laws that inhibit their growth. Gold mining is yet to stage a comeback.
Filipino jewelry designers have gone to win top awards in international competition.
Started almost at the same time, a similar industry in Thailand, despite the absence of gold or silver resources of that country, now fetches over US$1 billion a year in export revenue. (Philexport News and Features/Sunnex)
