BSP encourages public to use coins

As part of the central bank’s ongoing coin recirculation project, the Bangko Sentral ng Pilipinas (BSP) issued another advisory on Tuesday, July 18, to encourage the public to use and accept coins in cash transactions. The advisory reiterated a December 2022 BSP circular that increased the legal tender limit of coins per transaction from P1,000 to P2,000. The BSP also reiterated that a single transaction can exceed the limit if there is mutual agreement. “The coins may be used and accepted in amounts higher than the legal tender limits stipulated by the circular, provided that both payer and payee mutually agree to transact using quantities of coins above said limits,” the BSP said. Based on BSP Circular No. 1162, to promote coin usage the public can now pay as much as P2,000 worth of coins in specific denominations of P1, P5, P10 and P20 for single transactions. The BSP issued the circular on Dec. 1, 2022 which replaced Circular No. 537 of 2006. The circular also ruled that the smaller coin denominations will have a P200 legal tender limit for single transaction. These includes the 1-sentimo, 5-sentimo, 10-sentimo and the 25-sentimo. The previous legal tender limit was P100. “The central bank encourages the public to use and accept coins in cash transactions to promote the efficient recirculation of coins in the country,” said the BSP. Meanwhile, in June this year the BSP launched its Coin Deposit Machine (CoDM) Project to prevent coin hoarding. The BSP deployed 10 CoDMs: two in SM Mall of Asia; one in Robinsons Ermita; and one in Festival Supermall in Muntinlupa. Six other CoDMs were distributed last month. The 10 pilot CoDMs are part of 25 to be released in Metro Manila this year. The BSP said by June 2024, it will assess if the project will be expanded to other regions or if they need to add more machines. These automated CoDMs 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, said the BSP. 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. 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.