Benefiting from the soaring gold prices, the market value of the Philippine central bank's gold holdings surged by 70%, setting a record high.

Driven by the strong surge in global gold prices, the market value of gold reserves held by the Central Bank of the Philippines soared by nearly 70% in 2025, reaching a historic high. This rapid expansion in asset value has not only significantly boosted the country's overall foreign exchange reserves, but has also pushed the proportion of gold in its reserves far beyond the officially set ideal range, attracting market attention to the central bank's asset allocation strategy.

According to data released by the Philippine central bank on Wednesday night, as of the end of 2025, the value of its gold holdings climbed to a record high of $18.6 billion. This growth is mainly attributed to the revaluation effect in the precious metals market, rather than a simple increase in physical holdings. The Philippine central bank did not disclose the specific weight of its gold holdings in its report.

Data shows that the current proportion of gold in the Philippines' total foreign exchange reserves has reached around 17%. This ratio deviates significantly from the target range previously set by the country's monetary authorities, bringing the issue of asset portfolio rebalancing to the forefront. This development highlights the direct impact of last year's commodity market fluctuations on sovereign balance sheets and also suggests the possibility of future adjustments in official reserve management.

Valuation Effect Drives Asset Appreciation

The surge in the value of the Philippine central bank's gold assets directly reflects the trend in international gold prices. Data shows gold prices rose more than 60% over the past year. This price-driven asset appreciation effect is the core factor behind the rapid expansion of the Philippine central bank's on-paper wealth.

Although the bank did not disclose the specific amount of gold held, comparing the increase in value with the rise in market prices clearly shows that revaluation is the main driving force. For emerging market central banks with substantial physical gold reserves, rising gold prices provide a significant asset buffer but also present challenges in asset allocation deviating from preset targets.

Holding Ratio Exceeds Target, Draws Attention

With the rapid expansion in market value, the weight of gold in the Philippines' foreign exchange reserves has surpassed policymakers’ comfort zone. As of the end of 2025, the 17% ratio is noticeably higher than the official ideal level.

Monetary Board member Benjamin Diokno stated last October that ideally, the proportion of precious metals in total reserves should be kept between 8% and 12%. The current actual ratio has exceeded the upper limit by about 5 percentage points, which may prompt the central bank to review its reserve composition in the future and assess whether tactical adjustments are needed to return to the target range.

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