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We’re losing all our gold to China

SPYBITS (The Philippine Star) - September 21, 2015 - 10:00am

Our sources within the mining industry confirmed that over 90 percent of all the gold production from small-scale miners is being smuggled to China via Hong Kong. The 1991 small-scale mining law says all the gold extracted by miners should be sold to the central bank which buys them at prevailing world market prices, but ever since the imposition of a seven percent tax – two percent excise tax and five percent withholding tax – of all gold sales in 2011, there has been a steady decline in the amount of gold sold to the central bank, with the biggest drop registered at 92 percent in 2012.

The reason is obvious: the gold is being sold in the black market where the producers get more profit because no such tax is imposed on them. Hand-carried smuggling also accounts for much of the gold outflow, with foreign buyers – many of them on a tourist visa – coming in to buy the precious metal straight from the miners or through traders in the illegal market.

No wonder big mining companies are in an uproar over the proposed new mining law that seeks to hike taxes by as much as 71 percent – way above the 50-50 sharing scheme originally proposed which by itself is already considered unreasonable and way above existing standards in the global mining industry. Certainly, it’s easier for the small-scale miners to under-declare their production and just sell a token amount to the government – something that responsible big miners can’t and won’t do.

While China does not disclose trade data for gold, one only has to look at the gold export figures of Hong Kong – which acts as the conduit – to China which has reached record levels in the past five years. For sure, Hong Kong does not have gold fields so the vast amounts of the metal it exports to China comes from other countries – with the Philippines among the biggest sources. 

Central bank deputy governor Diwa Guinigundo has admitted that gold sales will continue to drop given the current tax regime.  The ball is now in the court of the BIR, he remarked. Unfortunately, BIR chief Kim Henares has taken an I-don’t-care attitude saying smuggling is the problem of Customs and other agencies.

The point however is that the high tax regime is driving the rampant smuggling – which leaves China as the biggest winner because it gets all our gold right from under our noses without paying necessary taxes. CIA insider Jim Rickards also alleged that the Chinese Army is involved in smuggling gold to the People’s Bank of China which reportedly has now a huge stockpile amounting to over 10 percent of all government-owned gold in the world. This could rock the global stock market and crush the US dollar, Rickards asserts.

China is really getting to be a problem with its behavior – claiming disputed territories, hacking government sites and trying to get all the gold in the world.

CA justice issues statement on CJH decision

Spy Bits received a statement from Court of Appeals Justice Noel Tijam, the ponente of the decision regarding consolidated cases involving Camp John Hay Development Corporation versus the Bases Conversion Development Authority, wherein the CA ruled that the private company is to vacate and revert certain leased properties to BCDA but only upon the latter’s payment of P1.4 billion.

The 67-page decision “was arrived at after conducting four exhaustive hearings. The Decision is written in plain simple English. The factual, legal and jurisprudential bases are clearly and distinctly stated,” the statement read, urging media and the public to read the Decision to weed out the untruthful and self-serving statements of the parties involved.

“There is no truth to BCDA’s assertion that the CA Decision is detrimental to the government’s financial interests. The Decision clearly declares that the rights and interests of 3rd parties vis-a-vis the BCDA must be litigated and adjudicated in separate arbitration proceedings or before the courts” the statement further said.

The order for BCDA to pay CJH DevCo P1.4 billion is not the CA’s doing but made by the arbitral tribunal because of the finding of mutual breach – and this was not contested by the BCDA, Justice Tijam explained, adding that any perceived financial loss by the government is due to the BCDA’s failure to implead the third parties during the arbitration proceedings.

“The case is now pending appeal with the Supreme Court. Common sense and legal propriety dictate that the merits of the case be left to the collective wisdom of the Supreme Court and not through the media. Since the matter is sub judice, only the Supreme Court can declare with finality whether the CA Decision is ‘highly irregular’ or correct. No amount of misrepresentation or drumbeating will sway or influence the Court,” the statement ended.  (The full text of the Decision dated July 30, 2015 can be accessed on this link: http://ca.judiciary.gov.ph/cardis/SP140422.pdf.)

People dreading a repeat of ‘Carmageddon’

Erratic weather patterns are making motorists and commuters wary about a repeat of the Sept. 8 “Carmageddon” when flashfloods stranded thousands for over five hours.  While certain areas along EDSA are sporadically experiencing smooth traffic flow, gridlocks continue in C5, Commonwealth and Quezon Avenue with secondary roads also turning into chokepoints. The P2.4 billion daily losses due to traffic reported in the 2012 JICA study has most likely ballooned to over P3 billion – and government has to act fast to resolve right of way issues and other hindrances to big ticket infra projects like the Cavite-Laguna Expressway and the NLEX-SLEX Connector Road which seems to be in limbo with all the arbitrary and whimsical changes by certain government agencies. According to studies, the NLEX-SLEX Connector Road would decongest EDSA, C-5 and other roads in Metro Manila’s inner cities because these choked arteries would be freed of heavy vehicles traveling to and from Manila’s Port Area. 

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Email: spybits08@gmail.com

ACIRC BANK OF CHINA BASES CONVERSION DEVELOPMENT AUTHORITY CAMP JOHN HAY DEVELOPMENT CORPORATION CARMAGEDDON CAVITE-LAGUNA EXPRESSWAY CONNECTOR ROAD DECISION GOLD HONG KONG SUPREME COURT
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