Silver Billion – This weeks Blog Q&A is with Vergel Villasoto who is a Director at Silver Bullion Pte Ltd based here in Singapore, Vergel has for several years been working in the precious metals & bullion industry, as well as that he has hands on experience in the financial services line working both in private equity and commodities trading.
1. So to kick this off why not tell us a little bit about yourself? What first brought you to Singapore?
Originally from the Philippines, I have been living in Singapore since 2003, when I followed my father who was working here at that time as I wanted to take up university studies here. I studied information systems management with a second major in finance. Practically having spent half my life here, you can say I am pretty much rooted here with my wife and two young children.
2. When did you first get involved in the precious metals business?
I was fresh out of university, and my first day at work as a writer for trade magazines was on 15th of September, 2008, that fateful day when global financial markets were on the verge of collapse. A couple of months after leaving my first job, Gregor Gregersen, a good friend of mine, was hatching the idea of Silver Bullion and was sharing his plans on how to start operations. He passed me a copy of Mike Maloney’s “Guide To Investing in Gold and Silver”, and I learned much more from the book about real finance than from university. After working in private equity for a couple of years, I joined Silver Bullion in earnest in early 2011 and I have been here since.
3. Silver Bullion is not all about Silver as the name suggests, can you tell us more about Silver Bullion?
Silver Bullion started off selling solely silver back in 2009 (we now sell all the major precious metals as well as nickel), but we have grown to be much more than a bullion dealer. We are in the business of Systemic Wealth Protection, and clients come to us to protect their hard-earned assets from bad governments, counterparty risks in and among financial institutions and potential crises such as unrest or conflicts in their home countries. When customers buy from us, we understand their goal in mind, which is to ensure their assets are safe in Singapore yet still within reach should they need it.
4. The cross over to digital seems obvious but not to everyone, what sets Silver Bullion apart from its nearest competition?
You can say what sets us apart from the competition is that we do not see competition as much as we see possible points of cooperation. We like to collaborate with different parties, associates and even customers, evaluating everyone as potentially stakeholders in projects we embark on.
As an example, our P2P lending program was conceptualized for two years, from mid 2013 up until its launch in July 2015. During the development phase, we sought feedback from our marketing affiliates and from our customers as well on how to mold the system. What resulted from these various points of feedback was the world’s first peer to peer lending program backed by precious metals. We are soon approaching SGD 190 million worth of loans facilitated, since inception.
Gregor, even these days, is heavily involved in developing systems for Silver Bullion and our subsidiaries. By focusing on IT and for the past couple of years, the fintech aspect of the business, we like to ‘compete with ourselves’ and roll out new programs which benefit our customers.
While our tilt toward utilizing technology is obvious, the underlying principle never wavers: owning assets as much as possible in your name is what we strive for, for ourselves and for our customers. Our growth trajectory may not be too obvious to many but our company initially owned 10,000 silver ounces when it was founded. We now own approaching 600,000 silver ounces and 4,000 gold ounces, which largely serves as inventory we sell.
5. The Silver Bullion TV channel has taken off and is getting some good names featured such as Rick Rule, who came up with the idea of taking Silver Bullion in this direction?
It was actually the brainchild of Vincent and Patrick, guys from our customer service team. We look at it as an additional platform to encourage further discussion about precious metals, EV (electric vehicle) metals, cryptocurrencies, geopolitics and the world economy in general. The overriding idea is that we want to reach more people who would like to learn more about hard assets. It is not a channel focused on making money directly ie: from advertising nor for paid or sponsored material. We also do not push out our products and services too much on the channel.
6. How has the business been through the Covid situation, did you managed to keep a continuous supply of metal coming in?
It has been a phenomenal 18 month period for us. Even prior to Covid, with the price escalating upward for precious metals, we had a record year in 2019 in terms of profits. In 2020, we are on pace to more than quadruple our net profits from what was already a phenomenal year last year. To illustrate, we are on pace to store an additional 105 – 110 tons of silver this year.
Transporting coins and bars from North America and to some extent from Europe, have been difficult, if not expensive, to reach Singapore. We instead focused on sourcing within Asia-Pacific to ensure supply levels remain sufficient for our customers. While there have been extended delivery timelines because of less planes and less ships arriving at Singapore, premiums are slowly going back to normal – this happened earlier in the case of gold, whereas on occasion, delivery of silver is constrained due to its ‘bulkier’ nature; it gets pushed out of the limited spaces in planes or containers on ships.
7. What changes do you foresee in the precious metals industry in the next 5 years that will be a gamechanger?
Predicting the future is always tough. However, there is definitely a move toward digital gold, with gold being a much less volatile store of value compared to cryptocurrencies. More people will be tokenizing their gold or silver as a means of own and transferring assets without having to physically carry them.
Governments everywhere keep getting bigger and bigger, and in order to feed the state (and largely to satiate the welfare of the people), tax rates will have to keep going up. Because the global economy is largely debt based and populations everywhere (save perhaps for most of Africa) keep getting older, governments will tend to spend and overspend, some to the point of bankruptcy. When this happens, some societies would be willing to transact in gold and silver. At the same time that gold is going digital, because technology in vehicles, especially EVs, and the transportation infrastructure in general keep on improving – hence faster means of moving gold or silver – we might also see the trend of gold becoming more ‘physical’ in that gold might be used as a means of storing wealth and as a means to transact, closer to home.
8. The local precious metals competition is hot, Silver Bullion have been seen to take on some with legal case and of late we have even seen one website (bulliondealercomparator) where the actual website owner gives himself the highest ranking (talk about having no business ethics), do you see the local market getting smaller over time or is there room for everyone here?
The pie is really growing, because in an irrational world, Singapore and its leaders have maintained level headed policies, pragmatism and openness. We really are fast becoming the Switzerland of Asia. Hong Kong’s lead as a precious metals hub is still undisputed in this part of the world (largely because of its tax free status and its favoured status among Chinese nationals) but its status is steadily becoming eroded. We have received many requests from customers to transfer their holdings to us instead. Competition brings about benefits for the average consumer, and healthy competition pushes companies to improve ourselves and not just compete on pricing. We always strive to be ahead of the competition, and our customer base always takes notice. As of this time (November 2020), we are storing SGD 750 million worth of metals on behalf of thousands of customers.
9. Any updates or big plans underway at Silver Bullion you can share?
We, the Silver Bullion Group and our spin off entities, are working on a lot of projects all the time. The ones I can share are the following:
Goldheart Savings Account – our subsidiary, Goldheart Bullion, will be launching a savings program which will allow customers to own gold in fractional amounts. It will allow customers to enjoy tighter spreads than buying and selling physical bullion that is taken delivery of. This will be ready in the coming months.
P2P Lending in Euro – We will allow customers to be able to lend or borrow Euro, providing better returns than the sub-zero rates that had trickled down to the retail level in certain segments of the society in Europe and in Japan.
Deeper liquidity for Cache Gold Tokens – a spin off of Silver Bullion, Cache Private Limited tokenizes gold which are stored in approved vaults in Singapore and the US. We are listed on Bithumb Global, Bittrex Global and the decentralized exchange Uniswap.
Lastly, we will be making a big announcement in December. Stay tuned!
10. Tell us where people can find you personally and Silver Bullion online for more updates?
You may reach out to me via LinkedIn, or e-mail firstname.lastname@example.org, or visit our website at www.silverbullion.com.sg to find out more information about us. Last but not least, check out our ‘Silver Bullion TV’ channel on YouTube where we put out fresh content a few times each week.