August 29, 2009

BSP Gold Refinery

A few years ago, the Bangko Sentral ng Pilipinas (BSP) came out with a beautiful coffee table book entitled, “Ginto: History Wrought in Gold.” The book, which discussed our rich history in terms of our nation’s gold possessions, was the subject of one of my columns last year. A recent development at the BSP, which is in charge of refining Philippine gold to be sold to the international market, is worth another brief discussion.

Last May 28, the BSP gold refinery at the Security Plant Complex in Quezon City received good news from the London Bullion Market Association. The LBMA periodically certifies a list of refineries around the world that produce good quality gold.
Dr. Paterson Encabo, Deputy Director of the BSP Department of General Services, said the Bank’s gold refinery had passed the LBMA’s proactive monitoring gold assaying test.

The BSP, Encabo said, continues to be included in the LBMA-accredited Good Delivery List (GDL).

“This means that if we say that our gold has a purity of 99.5 percent, the international market accepts it at face value,” Encabo explained. More importantly, he stressed, being on the LBMA’s list means that those who buy BSP-refined gold bars trust their quality.

Encabo said that the London Gold Market, the precursor of LBMA, first recognized the then Central Bank of the Philippines refinery as an acceptable melter and assayer of “good delivery” bars in September 1979.

Good delivery bars are the final output of the refining process, which involves the separation of gold from other elements such as silver and base metals, and the casting of the refined gold into bars.

“That year was the start of our gold refinery’s operations,” the BSP official said, adding that the Philippines was then among the only three countries in Asia recognized by the London Gold Market.

The LBMA was not that strict in determining the quality of gold bars before, Encabo said. But in 2001, the association decided to become more proactive in monitoring the percentage of gold bars by way of each refinery’s assaying process.

The first step in the LBMA’s monitoring process starts with the taking of a “dip sample” the size of a button from the normal gold production melt. Half of the dip sample would be assayed (this refers to the actual process of determining the percentage of gold) at the BSP refinery while the other half is sent to the LBMA. The LBMA would then forward the sample to a third assayer, also referred to as the “referee,” for analysis. This third party ensures that there is no bias during the whole testing process, Encabo explained.

Encabo said this was the second time the BSP refinery made it to the LBMA list. It last passed the gold assaying test three years ago.

“The most recent test results are good for another three years,” Encabo said. He added that it was a great honor for the BSP hallmark (or actual seal on the gold bar) to be recognized and respected internationally.
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My fellow Kiwanians from the Kiwanis Club of Muntinlupa, led by President Jimmy Ventura, recently had a field day visiting the BSP Money Museum and the pre-Hispanic gold collection at the Metopolitan Museum.

They oohed and aahed as Curator Ginny Cruz walked them through the different epochs in our history and explained the prevailing types of money during the period. They were also all amazed how our ancestors were able to make intricate and artistic gold ornaments with what were probably very crude tools at that time.

Another instant hit was the “money machine” which enabled the Kiwanian visitors to produce their own “money” with denominations up to P100,000 bearing their own photographs and signatures.

Both museums are open to the public Mondays to Fridays, from 9 a.m. to 4 p.m. --- courtesy of MB

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