The central bank will circulate an initial 10 million polymer banknotes in 1,000-piso denomination this quarter to test the market’s acceptance for plastic-based money.
The Bangko Sentral ng Pilipinas (BSP) said it is still finalizing the memorandum of agreement for the guidelines. The agreement will cover polymer familiarization by all banks and calibration of existing cash processing machines, vending machines, automated teller machines, bills acceptors, and other similar devices for compatibility with polymer banknotes, said the BSP.
The polymer banknotes’ limited circulation test will help the BSP assess the validity of the purported benefits of using plastic-based money, particularly the effects of polymerization on hygiene and public health, environmental sustainability, durability and counterfeiting rates, it said.
The BSP will start the full public issuance of the 1000-piso polymer banknotes in 2023.
It was reported earlier that the BSP has an authority to issue as much as 500 million pieces of 1,000-piso polymer banknotes in the next three years. The plastic money will be produced by the Reserve Bank of Australia subsidiary, Note Printing Australia.
In January, BSP Governor Benjamin E. Diokno said they also plan to produce other polymer banknotes in different denominations such as 500-piso and 100-piso if the public will adapt well to the first batch of polymer 1,000-piso bills.
The polymer version of existing paper-based banknotes will have flora and fauna design. The 1,000-piso plastic money will have as centerpiece the Philippine eagle. The 1,000-piso paper banknote featuring Jose Abad Santos, Vicente Lim and Josefa Llanes Escoda will remain in circulation alongside with the new 1,000-piso polymer banknotes.
Diokno said they will carefully monitor how the public will cater to polymer banknotes.
The 1,000-piso banknote is the country’s largest denomination in general circulation and it is also the most widely-circulated banknote in the Philippines. As such, it has the highest number of counterfeiting attempts despite that it has the most number of security features and the hardest banknotes to forge.
While paper banknotes will still dominate the money in circulation, the BSP wanted to have a test run for polymer bills to acquire significant feedback, and to determine the effect of polymer banknotes on currency handling as well as to attest its durability and lifespan.
The COVID-19 pandemic and concerns for sanitizing frequently touched objects including banknotes and coins is a key reason why the BSP has decided to source polymer money.
Polymer banknotes have low bacterial count compared to paper or cotton-based banknotes. Some central banks such the Reserve Bank of Australia have found out that polymer banknotes are safer than paper as it will not host viruses or bacteria.
The BSP also wants an environmental-safe and recyclable banknotes. The more durable and water-resistant plastic money will have a smaller carbon footprint, lower water and energy usage, and less environmental toxicity, said the BSP.
Also, polymer banknotes will have lower production costs and since it will last longer, it will eventually improve in terms of cost savings. Another potential benefits of polymer banknotes is that it is harder to counterfeit because of its security features.