The Bangko Sentral ng Pilipinas (BSP) said on Wednesday, Nov. 3, that it has retired some 519.93 metric tons of “unfit, demonetized, mutilated and counterfeit” (UDMC) coins by the process of defacement which started October last year until September 2022.

Coins considered unfit are those that are bent or twisted out of shape, corroded, and its weight reduced due to wear and tear. Meantime, coin defacement is done via machine, as explained by the BSP, and can be recycled depending on their metallic content. Defacement is a process that “alters the surfaces of coins to prevent them from being recirculated”.

About 70 percent or 364 metric tons of the defaced UDMC coins were considered unfit coins while 25 percent or 128 metric tons were mutilated. Another four percent or 21 metric tons were counterfeit, and one percent of the total or seven metric tons were demonetized.

The BSP said it retires UDMC coins to maintain the integrity of the Philippine currency.

“To reinforce its continuing efforts to maintain and protect the integrity of Philippine currency, the BSP is also seeking the enactment of a law defining and penalizing the excessive and unnecessary hoarding of coins,” the BSP also said.

The BSP wants to impose a more rigid package of penalties and sanctions against currency counterfeiting and to criminalize the stockpiling of large amounts of coins.

In relation to this, 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.

The BSP said Wednesday that under Republic Act No. 7653, as amended by RA 11211, the “BSP shall retire or destroy all Philippine banknotes and coins found to be unfit, mutilated, or demonetized, including seized counterfeits. This will ensure that only fit and legal tender banknotes and coins are circulated and used to purchase goods and services.”

The BSP has previously issued an advisory to the public to exchange or deposit unfit coins as part of its campaign to promote and improve its use and circulation.

Proper handling of coins also helps in preventing its unlawful use, said BSP officials.

The public may exchange or deposit unfit coins while coins of doubtful authenticity may be surrendered to banks for BSP inspection. If deemed unfit, said coins will be withdrawn from general circulation.

The BSP has a Clean Note and Coin Policy and Coin Recirculation Program. Part of its regular advisory is to remind the public that “willful defacement, mutilation, burning, or destruction of coins may be subject to imprisonment of up to five years” plus a fine of P20,000.