CEBU, Philippines - The Bangko Sentral ng Pilipinas (BSP) has confirmed the observation of Cebuanos that there is a shortage of one peso coin circulating in the market due to the smuggling of the coin denomination outside the country.
BSP Monetary Stability Sector Deputy Governor Diwa Guinigundo however said that BSP has already touched base with the Philippine National Police and the Bureau of Customs for the strict monitoring of this illegal activity.
He also said during a multi-sectoral meeting held at the Holiday Plaza Hotel last Friday that the unintentional hoarding of the one peso coin mostly by some business establishments that use the denomination in their transactions such as the automated tubig machines (ATMs), piso-piso Internet machines, coin-operated Karaoke and other vending machines has contributed to the perceived “coin shortage.”
“We don’t have a shortage of coins or notes in the country. But the seem-to-be shortage is because not all coins are being re-circulated. Some are trapped in drawers and piggy banks. The coins are there but they are not circulating,” Guinigundo said.
Felomino Lim of the Filipino-Chinese Chamber of Commerce and Industry said that retailers in Cebu have noticed the shortage of the one peso coin only three months ago.
Guinigundo said that this could be due to the one peso coin smuggling, which started before the 2008 Beijing Olympic Games.
“There was a high demand for metal in China (then). (And the police have apprehended) some people trying to smuggle one peso coin to China and Korea. This is why the BSP has changed the metal composition of the denomination,” he said.
The old one peso coins are made up of Cupronickel, an alloy of copper containing nickel and strengthening elements such as Iron and Manganese. Cupronickel is highly resistant to corrosion in seawater because its electrode potential is adjusted to be neutral with regard to seawater. Because of this, it is used for piping, heat exchangers and condensers in seawater systems as well as marine hardware, and sometimes for the propellers, crankshafts and hulls of premium tugboats, fishing boats and other working boats.
The newly-minted one peso-coins are already just nickel-plated so as not to make it attractive to unscrupulous persons.
With regard to the one peso coins trapped in piso-based business machines, Guinigundo appealed to operators of these businesses to quickly put back the coins in circulation, if possible, in two to three days or, use tokens instead.
The BSP has re-launched this year the National Coin Recirculation program, which was launched in 2006, in an effort to re-kindle the interests of various sectors in the program.
“Many have cooperated with the program in 2006. At some point they cooperate. But at some point, they get tired of cooperating. This is why we (BSP) have to remind them (to keep up the interest), Guinigundo said.