The Bangko Sentral ng Pilipinas (BSP) is calling for a strong law that will penalize coin hoarding in the country following law enforcers’ crackdown of some P50-million worth of bagged 1-piso coins in a warehouse in Quezon City.
“The BSP is advocating the passage of a law on the hoarding of an extremely large volume of coins, as the central bank believes that the criminalization of this activity reinforces continuing efforts to maintain and protect the integrity of Philippine currency,” the BSP said in statement on Sunday.
In the absence of a law, the BSP has a Coin Recirculation Program to encourage the public to “refrain from unnecessarily accumulating coins, and instead use them to pay for goods and services or deposit them in banks.”
The P50-million stockpile of 1-piso coins were seized from a warehouse in Barangay Laging Handa in Quezon City. After BSP agents’ initial inspection, they found out that the 1-piso coins are from various design series.
“Representative samples of the seized coins are now being tested by the BSP to confirm their authenticity,” said the BSP.
Coin hoarding results in the inefficient circulation of coins and prevents their primary use as medium of exchange, said the BSP, and it “hampers the efficient flow of transactions and causes an artificial shortage, which is disruptive to the financial system.”
The BSP is currently working with the National Bureau of Investigation, the Bureau of Customs, the Philippine Coast Guard and officials of the Barangay Laging Handa to further investigate the coin hoarding. It is also in close coordination with the “lawyer” of the alleged co-owner of the seized coins.
In 2020, about 73.8 percent of coins circulated in the country were produced in-house at BSP’s Quezon City facility, while 26.2 percent of coins were outsourced. There were 1.329 billion pieces of minted coins produced last year.
The BSP, which outsource coin blanks from foreign mint makers, has been encouraging Filipinos to use more coins to improve its recirculation.
An artificial shortage of coins may occur because of the common practice by people of keeping coins idle in bank vaults, drawers and piggy banks instead of re-circulating them.