To promote coin recirculation program and prevent hoarding, the Bangko Sentral ng Pilipinas (BSP) has partnered with the country’s top retailers for the use of automated coin deposit machines (CoDM).
During the pilot run of the project, the BSP will initially deploy 25 CoDMs in Metro Manila and select nearby provinces. The BSP has recently signed a Memorandum of Agreement (MOA) with SM Retail Inc., Filinvest Land Inc. and Robinsons Supermarket.
The BSP will gradually increase CoDMs in the next two years, said BSP Governor Felipe M. Medalla, to improve coin circulation.
“There is a problem when it comes to recirculating coins: some people hoard or collect them while some people leave them behind altogether, leading to an artificial coin shortage. This defeats their intended purpose as a medium of exchange,” he said.
Since 2005, the country’s coins per capita increased by 584 percent or from 50 pieces to 342 pieces as of June this year. The reason for this is because the BSP has increased its coin production over the past 17 years in response to a growing economy which has more demand for coins.
The BSP currently produce seven coin denominations. These are the 1-sentimo, 5-sentimo, 25-sentimo, 1-piso, 5-piso, 10-piso and 20-piso. The 10-sentimo has been removed when the New Generation Currency coins were re-launched in 2018, but it was not demonetized.
Medalla said he is hoping that the CoDM project will solve problems for businesses, financial institutions, and the public. “I’m very optimistic that after a two-year pilot run, we will be able to deploy these machines (in more locations) and I am confident that the benefits will be realized,” he added.
The BSP said these automated CoDMs will allow customers to conveniently deposit coins and redeem their accumulated value from partner retail establishments through shopping vouchers or rewards card points. Alternately, customers may opt to directly credit the amount to their participating bank accounts or electronic wallets, it added.
“Fit coins collected from the machines will be returned into circulation when partner retailers use them as change for over-the-counter payments of good and services. Unfit coins, on the other hand, will be removed from circulation and subsequently retired by the BSP,” said the BSP.
Coins considered unfit are those that are bent or twisted out of shape, defaced, corroded, and its weight reduced due to wear and tear.
The BSP has been calling for a strong law that will penalize coin hoarding in the country. In the absence of a law, the BSP utilizes its Coin Recirculation Program to encourage the public to refrain from unnecessarily accumulating coins.
Coin hoarding results in the inefficient circulation of coins and prevents their primary use as medium of exchange, said the BSP.
An artificial shortage of coins may also occur because of the common practice of keeping coins idle in bank vaults, drawers and piggy banks instead of re-circulating them.
As of mid-2021, there are some 36 billion coin pieces in circulation in varying denominations. Total value of these coins amount to P49.7 billion. The BSP has not yet updated this figure.