More vital money matter

There must be rhyme and reason when the Bangko Sentral ng Pilipinas (BSP) started its gradual shift to polymer bills in our country’s cash system. Initially, the shift is a pilot-testing of polymer P1,000 bills, being the biggest denominations of the Philippine peso. As previously announced, the BSP redesigned P1,000 bills made of polymer as part of a limited test circulation that began in April this year.

Antonio Lambino, BSP managing director for strategic communications and strategy, clarified this pilot-testing will help the monetary board (MB) determine and evaluate the benefits as well as the bad experiences in the actual use of the polymer bills. Lambino explained this to assuage the public over concerns and issues triggered by a social media post of alleged refusal to accept folded P1,000 polymer bills.

“The Bangko Sentral ng Pilipinas (BSP) informs the public that folded banknotes, whether paper or polymer, can still be circulated and accepted for payment. As such, retailers and banks should accept them for day-to-day payment transactions,” the BSP cited.

After being identified in a social media post as the establishment that allegedly refused folded P1,000 polymer banknotes, SM Supermalls also issued official statement clarifying that all their SM retail stores are accepting them as payment in all customer transactions. “Only those that are mutilated – stapled and ripped caused by [the] removal of staple wire – will be deemed unfit and not accepted. Our policy has considered the guidelines set by the Bangko Sentral ng Pilipinas,” it added.

Lambino came out in several rounds of radio and TV interviews last Monday to obviously do a fireman’s job to stave off a brewing controversy. If not corrected, it could cause undue harm to our country’s economy as a whole. There was actually no such adverse public reaction when the P1,000 polymer bills were first introduced and released into our country’s otherwise stable money system.

It was first ignited by loose pronouncements coming no less from newly installed BSP Governor Felipe Medalla during one TV interview. Medalla took over the BSP helm to complete the unfinished seven-year term of Governor Benjamin Diokno ending in July, 2023 yet. This was after Diokno was named by President Ferdinand “Bongbong” Marcos Jr. to be his new Finance Secretary.

During the TV interview, 72-year old Medalla was practically complaining that the P1,000 polymer could not be folded, lest it might get deformed and therefore unacceptable as legal tender. He then advised the public to have bigger wallets to avoid folding them.

The rule on folding the new banknotes came from the list of guidelines that the BSP issued on June 13 this year. In the list, one of the items reads: “DO NOT excessively fold or crumple the banknote.” In its latest statement, the BSP clarified that its guidelines apply to both polymer and paper notes. “The handling guidelines were issued to raise public awareness on the proper use of polymer and paper banknotes to safeguard their integrity and prolong their lifespan,” the BSP cited.

A former member of the Monetary Board (MB), Medalla was part of this policy-making body that approved the redesigning and shift to polymer material for the P1,000 bills. The new P1,000 bill replaced the design – featuring José Abad Santos, Vicente Lim and Josefa Llanes Escoda – on the main side of the note, with the spread out head of the Philippine Eagle. It kept the Tubbataha Reefs Natural Park and the South Sea pearl on the back side.

Following the Medalla off-the-cuff remarks came the social media post claiming folded P1,000 polymer bill was allegedly not accepted by one SM stall. As usual, this story spread like wildfire suspiciously at a time our country’s economy is going through a rough patch.

Speaking in behalf of the BSP, Lambino assured the public about the new and better security features of the P1,000 polymer bills. Aside as being the best prevention against counterfeiting, Lambino stressed the shift to polymer also seeks to address at the same time hygiene and public health concerns amid the COVID pandemic. This is because, he explained, the polymer can be washed without destroying it as a legal tender.

Being a polymer-based currency, it is also billed to have a longer lifespan, durable and is even a recyclable material and thus conforms with environmental sustainability, Lambino added. The BSP started circulating the P1,000 polymer banknotes that will replace the current abaca-made peso bills that include P500 and P100 paper bills.

According to former BSP Governor Diokno, the MB already stopped the printing of the P20 bills that would soon be phased out gradually. The cost of printing the P20 bills, Diokno pointed out, was found to be more expensive and less durable. These would eventually be replaced by the P20 coins released two years ago under BSP’s New Generation Coins. Before he stepped down as BSP Governor, Diokno announced, the next polymer banknotes would be the P500 bills. It would also feature a new design out of the flora and fauna series that the MB would decide.

The present batch of P1,000 polymer bills carry the signature of former president Rodrigo Duterte and Diokno as  the BSP Governor at the time of its printing and issuance. The succeeding new printing of our Philippine peso bills – of both paper and polymer – will soon have the signature of President Marcos and whoever will be the new BSP Governor.

So far, the BSP has released ten million pieces of the polymer P1,000 bills.

Of the estimated combined number of P1,000 paper-based and polymer banknotes in circulation already, this is only about 0.7 percent. By the middle of next year, Lambino cited the MB decision to produce and release 500 million pieces more of polymer banknotes to be circulated, or this constitutes about two percent of the total P1,000 paper-based and polymer in circulation.

Whether it is made of abaca or polymer, the more vital money matter is keeping strong the purchasing power of the peso.