BSP to Re-Design Banknotes and Coins

From Philstar.com

BSP to redesign banknotes and coins
By Jessica B. Natad (The Freeman) Updated June 15, 2010 12:00 AM

CEBU, Philippines - The Bangko Sentral ng Pilipinas (BSP) will soon change the designs of the banknotes and coins by yearend in order to incorporate more security features and signs of authenticity, especially in the bank notes.

In a multi-sectoral meeting with stakeholders in Cebu last Friday, BSP Monetary Stability sector Deputy Governor Diwa Guinigundo advised the public to take advantage of the coins and bank notes that are now circulating in the economy by using them everyday in their transactions before they get phased out.

“Two to three years after we issue the new generation notes—P20, P50, P100, P200, P500 and P1, 000 banks notes and coins, those with the old designs will be demonetized. (They will already be worthless,)” he said.

Guinigundo said the current notes were issued some 20 years ago and a lot of technologies, particularly on security and determining the authenticity of banks notes have developed.

“We want to take advantage of these technologies,” he said.

Meanwhile, the BSP has asked the help of banks in its coin recirculation program by accepting coin deposits from their patrons and exchanging these with bank notes. The BSP has re-launched the program, which was launched in 2006, to regain the interest and support of the public.

Cebu Bankers Club (CBC) president John Salas in turn asked the BSP to increase the coin allocation of Cebu, saying the province needs more coins in its local economy than the other provinces in the country due to its dynamic economic activities.

While BSP’s Guinigundo assured the CBC that the BSP “will look into the matter,” he said that the allocation of coins per province is immaterial because coins circulate nationwide.

As of 2009, some 15.6 billion pieces of coins are circulating in the economy with a total face value of P16.1 billion. Some 88 percent of the total coins in circulation are low-denomination coins such as 25 centavos, 10 centavos, five centavos and 1 centavo.

“Yet there is still a perceived shortage of these low-denominated coins,” Guinigundo said.

He said coins amounting to “tens of millions” were flushed out and back to the economy when the BSP launched the coin recirculation program in 2006. The support has however faded during the years. This is why BSP has re-launched the program this year.

BSP hopes to duplicate nationwide the support it gathered from various sectors such as the education, transportation, media, banks, the church and the retail sector in Manila. The BSP has signed memorandum of agreements with these sectors, which pledged contributions to the program.

The banks promised to provide and accept coins from retailers, individuals and non-government organizations and invest in facilities that will ensure the smooth flow of coins within the economy while the retailers promised to receive coins as payment and give exact change. The transport group’s contribution on the other hand is to encourage members to accept coins, even low denominated ones, from passengers and implement a coin exchange arrangement with the Philippine Retailers Association members who are heavy users of coins.

I heard that this is happening simultaneously around the globe. This is due to the global financial crisis and the cycle of the "fiat currency".

All numismatists look forward to the issuance of new coins and notes in the Philippines. I see a big difference between the introduction of the new coins, compared to the new BSP notes.

The changes in circulating coinage are driven by necessity - inflation and increasing costs of production and base metals - here as in the rest of the world. So the new mintage will answer the pressing needs for smaller, lighter, less costly coins. Still, there is the opportunity for new designs, themes, metals, all things we numismatists love.

The new banknotes are entirely another matter. Changes in themes that reportedly include World Heritage sites, and the redesign of the fronts of the notes as well are EXCITING! In addition, the prospect for a new P500 note including the portraits of both former President Cory and Ninoy, and signed by President Noynoy will be a remarkable moment in history. A possible change in BSP governors in the near future will add new signature combinations.

All the new note designs will generate interest, and possibly some controversy (since new notes often do!). I expect the next 12 months to be a wonderful opportunity to introduce numismatics to many non-collector Filipinos.

Kalookan, I must agree with what you say about the new notes, BUT I fear banknote collectiors are being screwed for as much as the BSP and dealers can get. This happened with stamp collecting, in recent years (Since 1980) there has been a massive increase in postal issues, this improves the income for the Post Office but it makes modern issues a joke, many collectors stopped collecting stamps and ventured into different fields (I being one). i started collecting Philippine banknotes in 1987 after my first trip to the Phils. I looked at the amount of issues and thought it a good thing to collecct. Then came the Dated Series of notes, more notes released in the last 12 years then the previous 100, not to mention the folders, overprints and a heap of error notes that are somehow "smuggled" out of the print shop. There are just too many issues!!!

You raise a couple good points about the proliferation of new notes, but here are a couple of thoughts on that:

1. I don't think the BSP began dating its notes about 1997 to encourage series collecting by date among numismatists.

2. The profit motive is even less likely because the BSP produces only modest numbers of presentation notes and folders.

3. Most of these notes are available in circulation or from bank branches at face value, or from dealers at fairly small amounts over face.

As far as the error notes are concerned, whose collection would be complete without a BSP P100 that named Arroyo an "arrovo"??? Kidding aside, I agree with you that many "errors" are pure fantasies. One such "midnight job" are the numerous mismatched serial number notes. I see them at nearly every show and auction. Then, just when the supply seems to be drying up, more suddenly appear! I ignore them.