BSP: “The unnecessary accumulation of banknotes and coins prevents Philippine currency from being recirculated and used as payment instrument.”
BSP — The Bangko Sentral ng Pilipinas warned the public that storing their money in containers could cause an “artificial shortage”.
On Wednesday, the central bank urged the public to deposit their savings in formal accounts instead of keeping those banknotes and coins at home.
Outgoing BSP Governor Benjamin E. Diokno explained that the unnecessary accumulation of coins and banknotes prevented the Philippine currency from being recirculated and being used as payment instrument.
Diokno added that storing coins and banknotes in containers — including jars, plastic bottles, barrels, and cabinets — could hamper the efficient circulation of the Philippine currency and could cause an “artificial shortage”.
According to Diokno, this would require the central bank to increase the amount of coins and banknotes in circulation, resulting in additional production costs.
“The BSP could mint fewer coins if they are efficiently circulating,” Diokno said in a statement. “The reduced production costs would allow the central bank to remit more dividends to the national government, which would help fund pandemic-response measures and social services.”
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The central bank also urged the public to deposit their savings in formal accounts with regulated institutions such as banks, cooperatives, microfinance institutions, and electronic money issuers.
Diokno also said that account ownership serves as a gateway to financial inclusion as it enables people to participate in the opportunities and benefits of the formal financial system.
Meanwhile, the central bank recently released guidelines on how to properly handle polymer banknotes.
The Bangko Sentral ng Pilipinas earlier said that the new “smarter and stronger” polymer banknotes are more hygienic and could last longer compared to paper banknotes.
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