The Bangko Sentral ng Pilipinas (BSP) will circulate the country’s first waterproof and dirtproof polymer banknotes in P1,000 or 1,000-piso denomination on Monday, April 18, at banks’ over-the-counter services.
A limited test run of some 10 million pieces of P1,000 polymer banknotes are expected to be out today as previously announced by the BSP. However, it will be a wait of another six months before Filipinos can access polymer banknotes in automated teller machines (ATMs) because the existing ATMs are not yet calibrated to dispense plastic-made money, at the moment.
Polymer banknotes are made of synthetic polymer substrates.
The BSP, which has been printing paper-based banknotes – specifically using the indigenous material abacca – since the early 1970s at its Quezon City security complex, will outsource polymer banknotes from Note Printing Australia, a subsidiary of the Reserve Bank of Australia. The BSP currently has no capacity to produce polymer banknotes.
Why polymer banknotes? The BSP has decided to circulate polymer banknotes for five reasons. It is hygienic and sanitary, and significantly cleaner; for enhanced security because it is harder to counterfeit; for durability because it has a longer lifespan; cost-effectiveness since it is economical in the long term; and it is environment-friendly because it is recyclable.
The BSP has studied polymerization for 13 years. But it was only in 2021, in the second year of the Covid-19 pandemic, when the central bank finally decided to outsource polymer banknotes because with the public health crisis, plastic-based money is more sanitary than paper money.
The chemical component of a polymer banknote makes its surface smooth and resistant to dirt, bacteria, and viruses. This was also the findings of the Department of Health based on its scientific studies, that viruses and bacteria survive for shorter periods on polymer banknotes compared to paper money, according to BSP Governor Benjamin E. Diokno.
“Because of the pandemic, we found ourselves frequently sanitizing our phones and other frequently touched items. Polymer bills can be sanitized with less risk of damage, making them a more hygienic alternative to paper banknotes,” said Diokno.
Polymer banknotes, which have smaller ecological footprints, will also last much longer, at least 2.5 times longer than paper banknotes, and could withstand extreme temperatures.
“Polymer banknotes’ resilience against extreme temperatures and resistance against water and dirt make them highly durable,” said the BSP in a report.
The advantages of polymer substrates are widely documented. Polymer banknotes are significantly cleaner and less susceptible to viral and bacterial transmission due to their smooth and non-absorptive surfaces.
Since they last longer, it will entail lower production costs versus paper money.
Citing other central bank experiences, the BSP noted that with polymerization, the costs of producing banknotes could be reduced by 40 percent to 60 percent. And, since polymer banknotes have a smaller carbon footprint, it also has lower water and energy usage.
“Its recyclability enables polymer banknotes to have more than one life cycle. Thus, the materials can be kept within the economy indefinitely and used productively, creating further value,” said the BSP.
Meantime, Diokno said the central bank will test the public’s acceptance with the release of the first batch of P1,000 polymer banknotes.
At the moment, the BSP is finalizing the memorandum of agreement to cover polymer familiarization by all banks and calibration of existing cash processing machines, vending machines, ATMs, bills acceptors, and other similar devices for compatibility with polymer banknotes.
Why P1,000 denomination? The P1,000 banknotes is the Philippines’ largest denomination in general circulation. It is also the most widely-circulated banknote in the country. As of end-2021, about 33 percent of currency in circulation are P1,000 banknotes.
It is also a susceptible denomination for counterfeiting, based on BSP data. About 49 percent of counterfeit banknotes last year were P1,000 bills. The BSP is confident, however, that its polymer version is harder to counterfeit because of its security features.
“Using advanced technology, polymer banknotes make counterfeiting significantly more difficult and costly,” Diokno told reporters last April 7. This was a day after the BSP presented the polymer banknotes in Malacanang.
As more Filipinos now prefer to transact payments and settlements via digital channels, the demand for P1,000 banknotes also increased even as demand for lower denominated currencies went down, said the BSP.
The polymer version of the existing paper-based P1,000 banknotes will have flora and fauna design and will have, as centerpiece, the Philippine Eagle.
“The design adopted for the polymer banknotes is consistent with the principles of currency integrity, social relevance, efficiency, unified theme and aesthetics, and enhanced security features,” said the BSP.
The Philippine Eagle is the focal point while on the reverse side are the images of the Tubbataha Reefs National Park, declared as a UNESCO World Heritage Site, and the South Sea Pearl.
The BSP will start the full public issuance of the P1,000 polymer banknotes in 2023.