Banknotes and Coins

April 2018

1. Under what authority does the Bangko Sentral ng Pilipinas (BSP)

issue currency?

The BSP is the sole government institution mandated by law to issue

notes and coins for circulation in the Philippines. In particular, Section 50
of Republic Act (R.A.) No. 7653, otherwise known as The New Central
Bank Act, stipulates that the BSP shall have the sole power and authority
to issue currency within the territory of the Philippines. It also issues legal
tender commemorative notes and coins.

2. 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 based on

currency demand that is estimated from a set of economic indicators which
generally measure the country’s economic activity. Other variables
considered in estimating currency order include: required currency
reserves, unfit notes for replacement, and beginning inventory balance.
The denominational breakdown is determined using the historical percent
share of the demand for each denomination.

The BSP likewise established a Currency Management Committee to

oversee the entire cash cycle covering forecasting of currency demand to
currency distribution to ensure that the issuance of currency is consistent
with monetary policy and adequate to meet the demand for notes and
coins. The total amount of banknotes and coins that the BSP may issue
should not exceed the total assets of the BSP.

3. How is currency issued to the public?

The Currency Issue and Integrity Office (CIIO) plans the currency orders
per denomination based on forecast of currency demand. The currency
order is submitted to the Currency Production Sub-Sector (CPSS) for
production of banknotes and coins. The CPSS delivers new BSP
banknotes and coins to the CIIO for issuance to the Cash Department
(CD) and the Regional Operations Sub-Sector (ROSS). In turn, CD
services withdrawals of notes and coins of banks in Metro Manila, while
ROSS takes charge of banks in the regions through its 22 Regional
Offices/Branches. Currency notes and coins are eventually issued to the
public when as depositors/clients, the public withdraw their deposits from
banks.

4. What is the volume/value of currency notes and coins in circulation?

There are about 3.5 billion pieces of notes valued at P1,217 billion and
28.9 billion pieces of coins valued at P33.2 billion in circulation as of 30
April 2018.1

1
Excludes commemorative notes and coins

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5. What does “legal tender power” of a currency mean?

Legal tender power means that when the currency is offered in payment of
a debt, public or private, the same must be accepted.

6. Is there a limit to the legal tender power of Philippine currency notes

and coins?

Philippine currency notes have no limit to their legal tender power. In

particular, all notes and coins issued by the BSP shall be fully guaranteed
by the Government of the Republic of the Philippines and shall be legal
tender in the Philippines for all debts, both public and private, as stipulated
under Section 52 of the New Central Bank Act. However, in the case of
coins in denomination of 1-, 5- and 10-Piso they shall be legal tender in
amounts not exceeding P1,000.00 while coins in denomination of 1-, 5-
and 10- and 25-Sentimo shall be legal tender in amounts not exceeding
P100.00, pursuant to BSP Circular No. 537, Series of 2006.

7. What is the restriction on currency import/export for Philippine Peso

notes and coins?

A person may import or export, bring in or take outside of the country, or

electronically transfer legal tender Philippine notes and coins, checks,
money orders or other bills of exchange in amounts not exceeding
P50,000. Prior authorization (from the BSP’s International Monetary
Affairs and Surveillance Sub-Sector) is required when the export or import
of Philippine currency exceeds this amount.

8. What is the New Generation Currency series?

The New Generation Currency (NGC) is the current banknote and coin
series used as payment for goods and services in the Philippines. The
NGC Banknote Series, issued by the BSP starting 16 December 2010,
features famous Filipinos, iconic natural wonders and Philippine fauna.
With the demonetization of the New Design Series (NDS) banknotes, the
NGC Banknote Series is the only series with legal tender power starting
2016.

On the other hand, the NGC Coin Series issued in 2018 features the new
BSP logo, three national heroes and endemic flora. The NGC coins are
equipped with enhanced security features using the latest technology in
minting to prevent counterfeiting. The BSP Coin Series, which is still in
circulation, was issued in 1995 and shall remain legal tender and can be
used alongside the NGC Coin Series for day-to-day transactions to pay
for goods and services, until such time as the BSP calls for the
demonetization of the said BSP Coin Series.

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9. What is demonetization of currency?

Demonetization is the process of removing the monetary value of a legal

tender currency by the issuing authority. Demonetized currency shall no
longer be accepted for payment of goods and services.

Section 57 of R.A. No. 7653 provides that the Bangko Sentral may call in
for replacement notes of any series or denomination which are more than
five (5) years old and coins which are more than ten (10) years old.

The NDS Banknote Series is the latest currency series demonetized by

the BSP. The deadline for the exchange of NDS banknotes with NGC
banknotes has been extended three (3) times in response to public
sentiment. The first deadline was set on 31 December 2016. The first
extension was until 31 March 2017, followed by the second extension
which was until 30 June 2017, and finally until 29 December 2017. BSP
Circulars on the demonetization of NDS banknotes and other pertinent
rules provided no exemption from the 29 December 2017 deadline for
exchange.

The images and description of all demonetized banknotes and coins can
be accessed at the BSP website, www.bsp.gov.ph, under the BSP Notes
and Coins section.

10. Why is the BSP replacing the design of our coins?

The BSP is introducing the NGC Coin Series with enhanced security
features using the latest technology in minting to prevent counterfeiting.
The metallic composition of the NGC coins was changed to discourage
illegal extraction of valuable metal content. In the past this practice has
resulted in the hoarding of large quantities of coins, for extraction of
metallic contents in overseas smelting entities. The metallic composition of
the NGC Coin Series also contributes to improved wear and corrosion
resistance capabilities.

11. How did the BSP select the design elements and security features
that are used in the NGC coins?
The designs, features, and other specifications of the NGC coins were the
result of an extensive and in-depth study by two expert Committees of the
BSP – the Numismatic Committee and the Currency Management
Committee. These Committees’ proposals were reviewed by the Monetary
Board and then recommended for final approval of the President of the
Philippines.

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12. What is the reason for the change in color of the NGC coins?

The NGC coins, which appear as “metallic silver”, are made of nickel-
plated steel which contributes to their improved wear and corrosion
resistance capabilities.

The change in plating technology shall address concerns on discoloration

which has been observed for brass and copper-plated coins, e.g., the
existing 25-sentimo, 10-sentimo, 5-sentimo and 1-sentimo.

13. What will happen to the BSP Coin Series currently in circulation?

The BSP Coin Series shall remain to be legal tender and can be used
alongside the NGC Coin Series for day-to-day transactions to pay for
goods and services, until such time as the BSP calls for the
demonetization of the said BSP Coin Series.

14. Is there a shortage of low-denomination coins?

None. There are about 28.9 billion pieces (bpcs) of coins valued at P33.2
billion issued by the BSP as of 30 April 20182. About 56 percent of the
28.9 bpcs of coins in circulation are low-denomination coins (i.e., 1-, 5-,
10- and 25-Sentimo). There are sufficient low denomination coins in
circulation that may be used by business owners in providing exact
change to the public.

The number of coins in circulation is equivalent to 275 pieces per

Filipino.3

15. Why does the public sometimes perceive a lack of coins? What has
the BSP done about it?

While coins minted are anchored on the demand of the economy, there is
still a perceived shortage of coins in some regions of the country because
of the common practice by people of keeping coins idle in piggy banks,
drawers, wallets jars, donation counters, etc., and not recirculation these
coins. Consequently, the BSP spends more to replace and infuse
additional coins in the financial system to augment the coin supply. As
there are 28.9 bpcs of coins issued by the BSP, the problem is not the
supply, but the recirculation of coins.

To address the perceived shortage of coins by the public, the BSP

continuously promotes the Coin Recirculation Program to encourage
regular use of coins and, at the same time, to raise funds to benefit public
elementary schools and the needy for their shelter needs, i.e. Tulong
Barya Para sa Eskwela and Tulong Barya Para sa Gawad Kalinga. The
BSP engages the support of various stakeholders for the Coin

2
Excludes commemorative coins.
3
The population of the Philippines is 104.9 million according to the latest census figures of trading economics 2017
(net of the 10 million OFWs).

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Recirculation Program and partners with private companies and

government offices for coin collection/exchange activities. The BSP,
together with its 22 regional offices and branches nationwide,
continuously conduct public information campaigns to make all sectors of
society realize fully the importance of coins and develop the habit of
regularly using them in the payment of goods and services, and in giving
exact change.

16. How does BSP preserve and maintain the integrity of the currency?

Corollary to its currency issue power, the BSP is mandated under Section
50 of Republic Act No. 7653, otherwise known as “The New Central Bank
Act”, to safeguard the integrity of the Philippine Peso. The BSP is vested
with police authority to investigate, make arrests, and conduct searches
and seizures in accordance with law, for the purpose of maintaining the
integrity of the currency.

The BSP also conducts information dissemination campaigns to train cash

handlers and familiarize the general public on the security features of
genuine Philippine currency notes and coins and other acceptable foreign
currencies. At the same time, BSP advocacies such as the Clean Note
Policy, Coin Recirculation Program, Revised Reward System and other
related campaigns are promoted. The 22 BSP Regional Offices and
Branches also conduct information dissemination campaigns throughout
the Philippines to familiarize the public on the features of the Philippine
currency and promote currency-related advocacies.

17. What does the BSP do with unfit and mutilated banknotes?

The BSP withdraws from circulation the unfit/mutilated banknotes and

demonetizes/retires the same by destruction through shredding.

18. Does the BSP have a directive to banks not to re-circulate unfit
notes and coins?

The BSP Circular No. 829, Series of 2014 or the Rules and Regulations
on Currency Notes and Coins, contains the consolidated rules and
regulations on currency notes and coins, which includes among others,
the provision on the treatment of unfit and mutilated bills, more
particularly quoted hereunder:

“Section 20. Currency notes and coins considered unfit for circulation shall
not be recirculated, but may be presented for exchange to or deposited
with any bank.”

BSP Circular No. 829, Series of 2014 can be downloaded from the BSP
website, www.bsp.gov.ph under the Regulations Section.

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19. Are banks required to accept mutilated currency notes and coins for
redemption/deposit?

Yes. BSP Circular No. 829, Series of 2014, requires banks to accept
mutilated currency notes and coins for referral/transmittal to the Currency
Issue and Integrity Office (CIIO), BSP-SPC, Diliman, Quezon City or any
of the BSP’s regional offices/branches for determination of redemption
value. Banks may charge reasonable handling fees from clients and/or
the general public relative to the handling/transporting to BSP of mutilated
notes and coins.

20. Are banks required to accept non-mutilated coins for deposit?

Yes. BSP Circular No. 897, Series of 2016, provides that banks shall
accept, without handling fees or charges, non-mutilated coins for deposit,
regardless of denomination, from the public.

21. How does one handle receipt of counterfeit money?

Any person or entity, public or private, who receives a note or coin which
is counterfeit or whose genuineness is questionable whether Philippine or
foreign currency shall:
- Issue temporary receipt to the owner/holder indicating the name,
address, community tax certificate or the passport number, if
foreigner;
- Indicate further the date of receipt, denomination, serial number in the
note or series in case of coins;
- Require the owner/holder to countersign the receipt; in case of refusal,
state the reason therein;
- The counterfeit money must be forwarded for examination/appropriate
action within five (5) working days after the receipt to the CIIO, BSP,
East Avenue, Quezon City. In case personal delivery to CIIO is not
feasible, delivery of said notes and coins may be made through the
BSP’s regional offices/branches or any banking institution under the
supervision of the BSP;
- If the situation warrants, report to the CIIO-BSP, the Philippine
National Police (PNP) or other law enforcement agencies for filing of
appropriate criminal charges for violation of pertinent articles in the
Revised Penal Code on counterfeiting.

22. What does the BSP do with counterfeit currency?

Pursuant to Section 6 of Circular No. 829 Series of 2014, all notes and
coins, whether Philippine or foreign, determined by the CIIO, BSP to be
counterfeit currency, shall not be returned to the owner/holder, but shall
be retained and later disposed of in accordance with such guidelines as
may be adopted by the BSP, except those which will be used as evidence
in an investigation or legal proceedings, in which case, the same shall be
retained and preserved by the BSP for evidentiary purposes.

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23. What if the person, who has the counterfeit currency, refuses to turn
in the counterfeit currency?

The individual who is requesting the turning in of counterfeit notes should

convince and explain to the holder that keeping counterfeit currency will
cause legal problems. If the holder of counterfeit note continues to refuse
the handover of the counterfeit note, the matter should be reported to the
nearest police agency/law enforcer, for appropriate action.

24. Does the public have the right to bring the case to the police?

Yes. Section 5 of Rule 113 of the Rules of Court provides that a peace
officer or a private person may, without a warrant, arrest a person:

(a) When, in his presence, the person to be arrested has committed, is

actually committing, or is attempting to commit an offense; and
(b) When an offense has just been committed, and he has probable
cause to believe based on personal knowledge of facts or
circumstances that the person to be arrested has committed it.

25. Does the BSP offer reward for information on counterfeiting

activities?

Yes. In 2004, the BSP Revised Reward System was launched designed
to encourage public support and participation and to ensure better
chances of successful anti-counterfeiting operations. The said system
provides financial reward to persons who give information on
counterfeiting activities of unscrupulous individuals that led to their arrest,
seizure/confiscation of counterfeit currencies and counterfeiting
paraphernalia and the filing of appropriate charges in court. The coverage
of the BSP Revised Reward System was further expanded on 12
February 2009 to include information involving the hoarding and
mutilation/destruction of Philippine currency coins.

26. What do we do when we catch a person writing/putting marks in

banknotes?

In case you caught a person writing/putting marks in banknotes, please

warn or inform the person of the Anti-mutilation Law or Presidential
Decree No. 247 which prohibits and penalizes the act of currency
defacement (writing/putting marks), mutilation, burning, tearing or any
manner showing act of wilful/intentional mutilation.

Should the act becomes habitual to a particular person, the matter should
be reported to the nearest police agency/law enforcer, for appropriate
action or contact the Currency Issue and Integrity Office, BSP for
assistance at Tel. Nos.: 988-4833 and 926-5092.

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