BSP to issue 158 M polymer banknotes this year

The Bangko Sentral ng Pilipinas (BSP) will circulate the next batch of P1,000 polymer banknotes in September to complete a planned issuance of 158.4 million pieces this year.

“The next tranches of the polymer banknotes are expected to be issued starting September 2022 until April 2023. An estimated volume of 158.4 million pieces will be issued within 2022 and 331.6 million pieces in 2023,” said the BSP in an email to Manila Bulletin.

The gradual issuance will bring a total public circulation of the P1,000 polymer banknotes to 500 million pieces until April in 2023.

Polymer P1,000 banknote

The staggered release of the plastic-based bills is intended to allow the BSP time to “assess the benefits and costs associated with a shift to polymer.”

Meantime, the central bank reiterated in the same email that the photo circulating online of a purported P500 polymer banknote with the image of a Tarsier is fake. “Only the 1000-piso polymer banknote has been approved and the BSP has not issued any new banknote design for other denominations,” it stressed.

The Philippine Eagle is the focal point of the first polymer denomination. 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 central bank plans to circulate more polymer banknotes in different denominations such as P500 and P100 in the future, especially if the public will adapt well to the first batch of polymer P1,000.

The polymer banknotes will be produced, supplied and delivered by just one polymer banknotes printer Note Printing Australia, subsidiary of the Reserve Bank of Australia. The BSP currently has no capacity to produce polymer banknotes.

Last April 18, the BSP released the first batch of 10 million pieces of polymer banknotes to the public but since banks’ automated teller machines (ATM) are not designed to dispense plastic bills, the polymer banknotes will only be available via over the counter services.

Are banks ready for polymer?

The central bank has conducted technical briefings for bank personnel, machine suppliers, and cash-in-transit service providers to educate them on the design and security features of the polymer banknotes.

At this time however, polymer banknotes will only be available at banks’ over-the-counter transactions. By October at the latest, the new plastic bills will be accessed through the ATMs following recalibration of existing ATMs. As of end-September 2021, BSP data showed there are 12,387 onsite ATMs and 10,548 offsite.

Bankers Association of the Philippines (BAP) president Antonio C. Moncupa Jr. is assuring the banking public that banks will be ready for the polymer banknotes.

“Polymer notes is widely used across the world. But just like most new things, and also because this is money, banks will need some time to ensure a smooth adoption of the new notes and avoid public inconvenience,” Moncupa told Manila Bulletin.

He said cash machines like counters, the ATMs will have to be calibrated “to ensure everything is working well.”

Moncupa, who is also the president and CEO of the Gotianun-controlled East West Banking Corp., noted that the “sheer magnitude of total installed ATMs plus the standard testing practice to several rounds of testing needs a little time.”

As for EastWest Bank, Moncupa expressed confidence that his bank will complete all preparations for the plastic-based banknotes. “Since banks are generally using the same type of machines, I expect the banks to complete the process more or less within the same time frame,” he said.

Bank of the Philippine Islands (BPI) chief operating officer, Ramon Jocson said the Ayala-led bank supports BSP’s polymer issuance. “All ATM and CAM will be calibrated to dispense or accept polymer banknotes. Our service providers are developing the calibration software for our machines. Target is towards the end of this year in compliance with the BSP mandate,” said Jocson.

The country’s biggest bank, the SM Group’s BDO Unibank Inc., is also in the process of reviewing their current ATM networks.

“We are supportive of the BSP's continuous efforts to modernize and improve circulation of banknotes. At this time, with respect to polymer banknotes, we are unable to provide any further information beyond what has been already disclosed in public by the BSP,” BDO told Manila Bulletin.

Meantime, Security Bank Corp. has expressed a more explicit support of polymer banknotes.

“Security Bank is in the process of conducting industry testing of ATMs to accept the new banknotes, in compliance with the (BSP) mandate to roll-out the polymer-based 1000-piso eNGC (New Generation Currency) banknotes,” said the bank. “We expect testing to be completed in May so that Security Bank's branch-based ATMs can start dispensing the new notes in June. The bank sees full dispensing of the new notes by Q3 (third quarter) 2022,” it added.

As for the Ty-owned Metropolitan Bank and Trust Co., it is also currently assessing its ATM network. “Our priority is to ensure that our ATM units provide a smooth experience for our customers. We are already conducting calibration and testing and will deploy polymer banknotes once we are fully ready,” the bank told Manila Bulletin. It also said that polymer banknotes are “intended to benefit public health, promote environmental sustainability, and prevent counterfeiting.”

The BSP has prepared 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.

What are polymer banknotes?

Polymer banknotes, which are waterproof and dirtproof, are made of synthetic polymer substrates. Since 1988, the world has been using polymer bills. The BSP has in fact been studying its use since 2008.

The BSP has decided to circulate polymer banknotes for its hygienic and sanitary values, and it is also significantly cleaner. These are important features for a banknote especially in a pandemic.

Polymer banknotes have enhanced security and harder to counterfeit and it is also durabie because it has a longer lifespan. It is cost-effective since it is economical in the long term and it is environment-friendly because it is recyclable.

The chemical component of a polymer banknote makes its surface smooth and resistant to dirt, bacteria, and viruses. The Department of Health, based on its scientific studies, has noted that viruses and bacteria survive for shorter periods on polymer banknotes compared to paper money.

“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 BSP Governor Benjamin E. Diokno.

Polymer banknotes, which have smaller ecological footprints, will also last much longer or 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.

Citing other central bank experiences, the BSP also 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.

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.