pare 06 SEP 2016

Republic of the Philippines
House of Representatives
Quezon City

Seventeenth Congress
First Regular Session

HOUSE BILL NO, 3471

Introduced by Honorable Joseph Stephen S$. Paduano

EXPLANATORY NOTE

This bill seeks to regulate the purchase of gold and silver by jewelry
enterprises from other sources, amending for the purpose Republic Act (RA)
No. 8502, otherwise known as the “Jewelry Industry Act of 1998."

Section 3 of RA 8502 authorizes jewelry enterprises to buy gold and
silver directly from other sources. However, the term “other sources” was not
adequately defined by the law. Thus, small-scale miners sell their gold and
silver to jewelry enterprises instead of the Bangko Sentral ng Pilipinas as
mandated by Section 17 of RA 7076, otherwise known as the “People’s Small-
Scale Mining Act of 1991,” which provides, in part, that “All gold produced by
small-scale miners in any mineral area shall be sold to the Central Bank, or its
duly authorized representatives, which shall buy it at prices competitive with
those prevailing in the world market regardless of volume or weight.” Further,
Section 69 of RA 7653 or the “Central Bank Act” states, in part, that “The
Bangko Sentral may buy and sell gold in any form, subject to such regulations
as the Monetary Board may issue.”

These laws firmly stipulate that sale transactions of gold of small-scale
miners should only be through the Bangko Sentral ng Pilipinas. However, in
2011, the Bureau of Internal Revenue mandated the collection of excise and
withholding taxes from small-scale miners. The Bureau of Internal Revenue,
through the Bangko Sentral ng Pilipinas, collects 2% excise tax and a creditable
withholding tax of 5% of gross payments from small-scale miners. Thus, a
massive drop in the gold-buying trade of the Bangko Sentral ng Pilipinas with
small-scale miners was observed.

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The decline in the trade of gold to the Bangko Sentral ng Pilipinas
became the gain of jewelry enterprises and the non-formal market because gold
is a saleable and valuable commodity which is essential to their business.
Jewelry enterprises took advantage of this circumstance and purchased gold and
ilver directly from these small-scale miners. But, in order for the Bangko
Sentral ng Pilipinas to maintain adequate international reserves and promote
monetary stability and convertibility of the Philippine peso, immediate action
must be taken.

This bill seeks to regulate the purchase of gold and silver by jewelry
enterprises from other sources and also mandates them to submit a report
indicating their sale transactions of gold and silver from those sources to the
Department of Trade and Industry. The Department of ‘Trade and Industry is
also mandated to furnish the Bangko Sentral ng Pilipinas the copy of the report
submitted by jewelry enterprises relating to gold and silver transactions,

In view of the foregoing, carly passage of this bill is earnestly
recommended.

JOSE) EN S. PADUANO


Republic of the Philippines
House of Representatives
Quezon City

Seventeenth Congress
First Regular Session

HOUSE BILL NO. (8471

Introduced by Honorable Joseph Stephen S, Paduano

AN ACT
REGULATING THE PURCHASE OF GOLD AND SILVER BY
JEWELRY ENTERPRISES FROM OTHER SOURCES, AMENDING
FOR THE PURPOSE REPUBLIC ACT NO. 8502, OTHERWISE
KNOWN AS THE “JEWELRY INDUSTRY DEVELOPMENT ACT OF
1998”

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION I. Section 3 of Republic Act No. 8502 is hereby amended to
read as follows:

“SEC. 3. Development Incentives. ~ The following
incentives shall be available to qualified jewelry enterprises in the
jewelry industry:

a) xxx

Xxx Xxx XXX

f) Authority for jewelry enterprises to buy gold and
silver directly from other sources EXCEPT FROM SMALL-
SCALE MINERS;

g) Xxx XXX XXX


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h) xxx Xxx XXX,
JEWELRY ENTERPRISES MUST SUBMIT A
MONTHLY REPORT INDICATING THEIR PURCHASES OF

GOLD AND SILVER FROM OTHER SOURC

TO THE
DEPARTMENT OF TRADE AND INDUSTRY. — THE
DEPARTMENT OF TRADE AND INDUSTRY SHALL
PERIODICALLY FURNISH THE BANGKO SENTRAL NG
PILIPINAS THE COPY OF THE REPORT RELATING TO
GOLD AND SILVER TRANSACTIONS.”

SEC. 3. ‘The Secretary of Trade and Industry shall, within sixty (60) days
after the effectivity of this Act, promulgate the rules and regulations for the
effective implementation of this Act.

SEC. 4. This Act shall take effect fifteen (15) days after its publication in

the Official Gazette or in a newspaper of general circulation.

Approved,