BSP eyes limited testing of ‘more durable’ polymer ₱1,000 bills by 2022

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Metro Manila (CNN Philippines, October 25) — The Bangko Sentral ng Pilipinas is eyeing the use of polymer banknotes by the first half of next year, an official said Monday.

In a briefing, BSP deputy governor Mamerto Tangonan said they hope to be ready to test a “few hundred million pieces” of ₱1,000 bills made of polymer material nationwide by the first half of 2022. The high denomination was chosen because it is the banknote most used in automated teller machines, he added.

Banknotes made of polymer also have a lifespan 2.5 to 4 times longer than that of paper banknotes and can be melted and reused once declared unfit, he added. This makes them more cost-effective as it takes longer to replace them, noted Tangonan.

Given their durable and unique makeup, polymer banknotes can be sanitized without getting damaged. Citing a study from Mexico, the BSP official reported that polymer bills were found to have less bacteria than cotton-based notes.

Polymer bills are likewise more difficult to fake, according to the central bank official, noting that facilities and materials used to produce them are less accessible to the public than the usual paper and printers used by counterfeiters. They also have a different set of security features, he added.

The current peso bills are made of cotton-abaca and have an average lifespan of 18 months. Testing the effectiveness of polymerizing banknotes, meanwhile, could last from 45 to 72 months, or about three to six years.

Tangonan assured that the effect of polymerizing banknotes will have a “minimal” effect on the abaca industry, adding that the test will displace only about 0.1% to 0.2% of overall abaca exports, or roughly 210 to 481 jobs. He said the central bank has been ramping up utilization of abaca in its corporate products and coordinating with other agencies to further promote its use.

Should the test be successful, the deputy governor said it would be up to authorities succeeding them to decide on the next step.

“After a successful testing, we have to present to the next set of policymakers how to proceed or where to go from there. We already have the actual data under Philippine local conditions for the policymakers to make a very well-informed decision on what to do next,” said Tangonan.

The BSP bases its planning and research on polymerizing peso bills from the experiences of the central banks of Australia, Canada, Mexico, New Zealand, and the United Kingdom.