The Philippines is weighing a proposal to establish one of the world’s largest government-held Bitcoin reserves after Camarines Sur 5th District Representative Miguel Luis Villafuerte introduced House Bill No. 421, or the “Strategic Bitcoin Reserve Act,” in the House of Representatives.
The measure directs the Bangko Sentral ng Pilipinas (BSP), the Philippine central bank, to accumulate 10,000 BTC over a five-year period, with an annual purchase of 2,000 BTC. The holdings would be stored in secure cold storage facilities distributed nationwide and locked for 20 years, with limited exceptions.
The proposed bill mandates that no more than 10% of the reserve may be liquidated in any two-year period after the minimum holding period. Funds could only be sold under strict conditions, such as retiring sovereign debt.
As of November 2024, Philippine government debt stood at PHP16.09 trillion ($285 billion), with nearly 68% owed domestically. Supporters of the proposal argue that diversifying beyond gold and the U.S. dollar could provide long-term financial security.
Transparency, oversight, and audits
According to the proposed bill, the BSP governor would oversee the program with assistance from the Department of Finance, the Department of Defense, and the Securities and Exchange Commission (SEC). The bill requires quarterly “proof-of-reserve” audits verified by independent third parties, with results published online.
The measure also reaffirms that private citizens remain free to hold and transact in Bitcoin, explicitly protecting property rights in digital assets. Villafuerte’s explanatory note argues that it is vital that the country stockpile strategic assets such as Bitcoin to provide financial stability and safeguard our national interest.
Global governments already hold Bitcoin
Data from CoinGecko, carried by cryptonews, shows that as of August 2025, 11 governments collectively control 480,196 BTC—worth about $55.6 billion—equal to 2.29% of total supply. The United States leads with 198,022 BTC, followed by China with 190,000 BTC.
Villafuerte pointed to these developments as part of the rationale for the Philippines to act now. With only 21 million BTC to ever exist, and nearly 20 million already mined, proponents say accumulation is a matter of timing.
Padilla: Bitcoin as a central bank reserve asset
Atty. Rafael Padilla, Co-Founder of BlockDevs Asia and Author of Crypto and the Law, made the case for Bitcoin reserves in his 2020 paper “Counterweight: The Case for Bitcoin as Central Bank Reserve Asset.”
Padilla described Bitcoin’s unique characteristics: “Bitcoin’s unique properties as a digital asset, its antifragile nature, lack of correlation with traditional assets, and its immutable fixed supply schedule make it a viable safe haven that is functionally comparable to gold.”
Padilla noted that adding Bitcoin to reserves could provide systemic protection. “When added to the central bank’s reserve asset portfolio, Bitcoin’s alternative financial system can also serve as a systemic hedge against the fragility of the present U.S. dollar-centric international monetary system.”
Rethinking international reserves
Padilla explained the function of reserves, saying, “International reserves may be understood as external assets held by a central bank to enable the conduct of international transactions, intervention in foreign currency markets, and maintain confidence in the exchange rate of the local currency.”
“Overall, international reserves enable central bank to manage a stable exchange rate and achieve domestic financial stability,” he added.
For that reason, Padilla emphasized caution. “It is important that a central bank should be able to preserve the value of reserves within conservative risk limits to allow the reserves to be available when they are needed. Consequently, reserve asset portfolios tend to be risk-averse where liquidity and security often precedes profit or carrying cost.”
Lessons from quantitative easing
Padilla also pointed to global monetary policy trends, stressing, “To save businesses on the brink of default, support unemployed individuals and ease the shock on falling asset prices, many central banks injected unprecedented levels of monetary and fiscal stimulus into the financial system.”
“As central banks in the developed world implement quantitative easing to expand the supply of money, their fiat currencies will tend to depreciate in value,” Padilla warned.
By contrast, he noted that Bitcoin has a deflationary design.
“While central banks unleash enormous level of QE, quantitative hardening takes place in Bitcoin protocol where new supply of bitcoin is programmatically reduced every four years in an event known as ‘the halving,’ a native feature that is a core aspect of Bitcoin’s monetary policy.”
Gold and its limitations
In his paper, Padilla acknowledged gold’s historical role but pointed out challenges.
“The conventional wisdom is that owning gold serves as insurance against harsh economic climate and unstable monetary system,” he said. “Gold is an equity asset and it is no one’s liability; this gives its holder a high degree of security because there is no counterparty risk.”
Still, Padilla cautioned that governments could interfere.
“If confronted with a major crisis in its monetary and financial system, the U.S. government, for example, could possibly resort to gold confiscation or a tax on gold profits measured in U.S. dollars, or both.”
“Relying on heavy metal as a safe-haven reserve asset does not align well with technological progress and the ever-expanding digital economy. The digital world necessitates a paradigm shift, and it requires a money that is digital, portable, and accessible to everyone while still retaining the qualities of a store of value,” Padilla argued.
Bitcoin’s cryptoeconomic features
Padilla emphasized Bitcoin’s innovation. “Bitcoin was the first engineering solution that allowed for digital payments without having to rely on a trusted third-party intermediary.”
“By being the first digital object that is verifiably scarce, Bitcoin is the first example of digital cash,” he said.
Adoption and feasibility in the Philippines
Padilla also stressed the legal feasibility of the proposal, saying, “Considering that the composition of international reserves are not limited by law to traditional reserve assets such as gold and foreign currencies… it is therefore legally feasible for the BSP to adopt bitcoin as a reserve asset that will be added to its international reserves.”
“As it grows, Bitcoin could eventually evolve as a widely-accepted global settlement system that will compete with the current international monetary system. Such development would only reinforce the arguments in favor of adding bitcoin to the central bank’s reserve asset portfolio to serve as a counterweight and a systemic hedge,” he concluded.
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Jun Bolivar