Osmeña files bill penalizing coin hoarding

MANILA, Philippines - Sen. Sergio Osmeña III has filed a bill, which aims to penalize the hoarding of legal tender coins of Philippine currency.

In the explanatory note of the Senate Bill 2452, the senator noted that the Bangko Sentral ng Pilipinas (BSP) has documented cases of unscrupulous hoarding and exportation of coins by syndicates, which smelt and convert coins for their metallic value for use as raw materials for mobile pbones, computers and other industrial applications.

All coins in circulation are made from various alloys of copper, brass, nickel, aluminum or steel.

The skyrocketing of prices for these metals has led to “seigniorage” or the debasement of the currency, when the intrinsic value of the metal in coins exceeds their face value.

Osmeña expressed concern that it would cost the government a substantial outlay of funds to replace the coins in circulation.

He also cited the report by the BSP which showed the increasing demand for one peso coins due to “automatic tubing machines,” vending machines and video karera machines. The use of coins in video and coin games such as “piso piso internet” and the habit of storing coins in piggy banks, drawers and wallets or jars also contribute to the inefficient coin recirculation and the shortage of coins.

Despite efforts by the BSP to prevent coin hoarding, Osmeña said the shortage of coins continues, which if unabated, may result in wider-reaching negative impact on the economy.

“To curb the hoarding of Philippine legal tender coins, this bill proposes to criminalize coin hoarding or the keeping or possessions of coins of any denomination beyond aggregate value, number of pieces and weight to be determined by the BSP committed by any person, corporation or partnership, association or any form of juridical personality,” Osmena said.

Under the proposal, hoarding is defined as keeping or possession by any person not engaged in business of legal tender coins of the Philippine currency beyond the aggregate value, number of pieces and wealth to be determined by the BSP.

Excempted from the bill’s coverage are charitable institutions, private banks, banking and financial institutions of the government, and government agencies and instrumentalities when they hold or keep such coins in connection with their businesses functions or official duties.

Under the measure, the BSP is authorized to review, change, if needed the aggregate amount every three years based on the prevailing value, supply of and demand for legal tender coins.