Crack open that piggy bank!
In bid to promote the re-circulation of coins and persuade more Filipinos to use this low-value currency in their everyday transactions, the Bangko Sentral ng Pilipinas (BSP) recently started deploying automated coin deposit machine (CoDMs) in various retail establishments such as SM, Robinsons, and the Filinvest group.
The Philippine central bank also partnered with businesses with a large network of retail establishments for the immediate deployment of an initial batch of 25 CoDMs across GMA and the nearby provinces. It plans to gradually increase these CoDMs in the next two years to further improve coin circulation.
These coin machines are actually intended to enable customers to conveniently deposit coins and redeem their accumulated value through shopping vouchers or rewards card points of the retail establishments.
Its objective is to entice more Filipinos to change their habit of storing coins inside piggy banks. Instead, the BSP wants them to insert loose change (barya) inside these machines in exchange for extra shopping credits. Customers may also opt to directly credit the amount of coins inserted to their participating bank accounts or electronic wallets.
For coins collected through the CoDMs, those deemed fit for circulation will be returned into circulation though the partner retailers. They can use these coins as change for any over-the-counter payments.
Unfit coins — those that have been bent, twisted out of shape, defaced, corroded, or show considerable reduction in weight — will be retired and removed permanently from circulation by the BSP.
“There is a problem when it comes to re-circulating coins — a number of people hoard or collect them, while some people leave them behind altogether, leading to an artificial coin shortage,” the BSP said in a statement. “This defeats their intended purpose as a medium of exchange.”
Aside from shortage, the inefficient re-circulation of coins could also force the BSP to produce more coins which can, in turn, translate to significant costs. Over the past 17 years, the BSP has been increasing coin production to meet growing demand, particularly in the retail sector where coins are used for change.
The BSP data show that there were 50 pieces of coins for every Filipino in 2005. This increased by almost seven times to 342 pieces of coins as of June 2022.
Law against coin hoarding pushed
In a related development, the Philippine central bank is now also pushing for legislation against coin hoarding.
The move came amid the recent seizure of about P50 million worth of coins through the joint effort of the National Bureau of Investigation (NBI), the Bureau of Customs, the Philippine Coast Guard, and the BSP. The group was able to seize a stockpile of P1 coins from a warehouse in Quezon City.
Samples from the pile are still being tested to gauge their authenticity. The central bank, however, noted that the coins seized were from various design series.
“The Bangko Sentral ng Pilipinas (BSP) is advocating the passage of a law on the hoarding of an extremely large volume of coins, as the central bank believes criminalization of this activity can reinforce continuing efforts to maintain and protect the integrity of Philippine currency,” the BSP said in a statement.
In the absence of such a law, the BSP is now encouraging the Filipino public to refrain from unnecessarily accumulating coins.
“Coin hoarding results in the inefficient circulation of coins and prevents their primary use as medium of exchange. It hampers efficient flow of transactions and causes an artificial shortage, which is disruptive to the financial system,” the statement added.
Under the BSP’s Coin Recirculation Program, Filipinos are encouraged to use coins to pay for goods and services, or to deposit them in banks.
It has also taken note of the Filipinos penchant for keeping coins inside bank vaults, drawers, and piggy banks, as well as in using coins as washers or worse, throwing them away as an inconvenience. These are all bad habits that the Philippine central bank wants changed.