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Banknotes

Banknotes

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Published by Mark Llego

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Published by: Mark Llego on Jan 10, 2013
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Banknotes and CoinsSeptember 2012
Cash Department1
1.
Under what authority does the Bangko Sentral ng Pilipinas (BSP) issue currency? 
Pursuant to Sec. 50, R.A. 7653, the BSP shall have the sole power and authority toissue currency within the territory of the Philippines.
2.
What does it issue? 
The BSP issues notes and coins for circulation in the Philippines. It also issues legaltender commemorative notes and coins.
3.
How is currency issued to the public? 
Security Plant Complex (SPC) delivers New BSP banknotes and coins to theCurrency Issue and Retirement Office (CIRO) for issuance to Cash Department(CD) and Regional Monetary Affairs Sub-Sector (RMASS). CD services withdrawalsof notes and coins of banks in Metro Manila; RMASS takes charge of banks in theregions through its 21 Regional Offices/Branches. Currency, notes and coins areeventually issued to the public, when as depositors/clients, the public withdraw theirdeposits from banks.
4.
How does the BSP determine the volume/value of notes and coins to be issued annually? 
The annual volume/value of currency to be issued is projected by forecasting thecurrency demand for fresh notes and coins using the linear regression forecastingmethod. This, in turn, is determined by the following variables, a) the currencyrequirement of the economy to support growth, b) inflation rate, c) the rate by whichcurrency are replaced/retired in line with the BSP’s Clean Note policy and otherconsiderations, and d) the existing inventory of notes and coins with the BSP. Thefirst two factors, are in turn based on the macro models while the third factor isbased on the historical data of demand deposits and withdrawals, as well ascurrency retirement. The denominational breakdown is derived using historical dataof demand deposit withdrawals of banks, deposits, and the replacement rate ofcurrency notes, disaggregated by denomination, as well as results of the survey onbanks’ currency needs by denomination. A Currency Management Committeeoversees the forecasting model for currency demand to ensure that currency issue isconsistent with monetary policy and adequate to meet the demand for notes andcoins.
5.
Is there a limit to the amount of notes and coins that the BSP may issue? 
The total amount of banknotes and coins that the BSP may issue shall not exceedthe total assets of the BSP.
 
Banknotes and CoinsSeptember 2012
Cash Department2
6.
What is the volume/value of currency notes and coins issued by BSP? 
There are about 18.71 billion pieces of coins valued at P20.57 billion and close to2.00 billion pieces of notes valued at P534.76 billion that had been issued as of 31August 2012.
7.
Why does the public sometimes perceive a lack of coins? What has the BSP done about it? 
There is no actual shortage of coins. There are 18.71 billion pieces BSP coinscurrently in circulation. Artificial shortage of coins may occur because of thecommon practice by people of keeping coins idle in piggy banks, drawers, wallets, jars, etc., and not re-circulating them. In a recent investigation conducted by BangkoSentral ng Pilipinas (BSP) agents, there is an increased demand for 1-piso coins dueto their use in “Automatic Tubig Machines” and coin games which contribute toinefficiency in the circulation of coins.Some groups in the past had tried to smuggle our 1-piso coins but were notsuccessful. BSP had documented cases of illegal hoarding for melting and shipmentto other countries. These illegal activities were closely monitored by the Bureau ofCustoms and BSP agents.To address the situation, BSP has conducted information/awareness campaigns tomake all sectors of society fully realize the importance of coins and develop the habitof regularly using them in payment of goods and services and in giving exactchange.BSP also launched the coin-recirculation program to promote regular use of coinsand to raise funds to benefit public elementary schools through “Tulong Barya Parasa Eskwela” campaign. “Tulong Barya Para sa Gawad Kalinga” was also launchedto help the needy for their shelter needs.
8. Is there a shortage of low-denomination coins? 
None. There are about 18.71 billion pieces of coins amounting to P20.57 billion incirculation as of 31 August 2012. About 57.28 percent of which is composed of lowerdenominated coins. Comparing against population, the number of coins is equivalentto 195.34 pieces of coins per Filipino.
1
 
9. Is the 1-sentimo coin still in existence? 
Yes. The 1-sentimo coin is part of the seven-coin denomination structure of thePhilippine peso.
1
 
Based on NSO’s population projection of 95.8 million using December 2011 estimates. If the 11.0 million OFs whoare not in the country are excluded, the coin to population ratio increases to 220.68 pieces.
 
Banknotes and CoinsSeptember 2012
Cash Department3
 
10. Why is BSP concerned with currency integrity? 
Corollary to its issue power, the BSP is also mandated under Section 50 of R.A.7653 to preserve and maintain currency integrity.
11. Does BSP have a handbook containing laws on protecting currency integrity? 
Pertinent laws and regulations to protect and maintain the integrity of the currencyhave been cited on page 21 of the BSP booklet, Know Your Philippine Currency.
12. How does BSP preserve and maintain the integrity of the currency? 
Currency Integrity is maintained as follows:
The Investigation Division, Cash Department is vested with police authority toinvestigate, make arrests, conduct searches and seizures in accordance with thelaw during the course of anti-counterfeiting operations.To encourage more public support and participation and ensure better chancesfor successful operations, the BSP launched in 2004 the Revised RewardSystem giving higher financial rewards to persons who give information oncounterfeiting activities leading to the arrest of suspects, seizure/confiscation ofcounterfeit currencies and paraphernalia and the filing of appropriate charges incourt to counterfeiters.The coverage of BSP Revised Reward System was further expanded with theinclusion of informers on cases of hoarding and mutilation/destruction ofPhilippine coins as being eligible for reward pursuant to Monetary BoardResolution No. 266 dated 12 February 2009.
The Currency Analysis and Redemption Division, Cash Department conductsinformation campaigns on familiarization of genuine Philippine and acceptableforeign currencies, counterfeit detection, BSP advocacies on the Clean NotePolicy, Revised Reward System, Coin Re-circulation Campaign and other relatedissues.

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