Back in 2022 when the Bangko Sentral ng Pilipinas was still pushing for the production and circulation of P1,000 polymer (plastic) bank notes, it had argued that the country would save P2.4 billion– from constantly printing paper notes whose life is 2.5 to 5 times shorter than those than plastic notes.
For this, the country had to tie up with an Australian printer to print the notes, junking the still very useful and constantly-upgraded printing machines used for paper notes that supported the local abaca industry. So what happens to those machines now? Another white elephant I suppose.
I strongly support Senate Minority Leader Koko Pimentel II's call for BSP to be more transparent and explain the result of its supposed trial of the P1,000 polymer notes, which no one was made aware of except perhaps a few in the Cabinet and the President. Why is everything so opaque in this administration?
How can BSP go ahead (as instructed by the President earlier) and expand the polymer use across other bank notes without reporting the results of their trial, Pimentel poised in a radio interview.
Pimentel said despite the limited period Congress has before the adjournment next year, lawmakers need to be assured that the BSP decision—announced last week with President Marcos Jr. himself unveiling the new polymer series—was based on transparency, a keen understanding of Filipinos’ habits in handling money, and fiscal responsibility.
He wanted to know the impact to the government’s bottomline of leaving the BSP’s main printing plant underutilized, after, he noted, “spending billions” to upgrade it the past few years? The plant prints paper notes, and is not equipped to print polymer notes, which the Philippine government has contracted out to an Australian supplier, the senator noted.
He questions if depending on an Australian supplier would be beneficial for the country or if it is wise to depend on a foreign group for our tenders.
He stressed the senators won't block the shift to plastic notes provided the BSP must answer key questions as part of its responsibility to the people. “They must answer questions on the money itself, the design, the printing of the money, etc.”
So what happens now to the huge printing plant in Quezon City in addition to what is now the fate of our abaca farmers, who have long found the printing of paper money a good source of their income instead of relying on the world abaca market.
People have not yet gotten over the fact that BSP replaced the heroes– who shed their lives for our life and liberty– being replaced by the flora and fauna. Was it politically motivated? The BSP must explain this as well.
BSP officials claimed the intention is not replace the hero series but to let the old notes circulate alongside the polymer notes.
Pimentel said he would be filing shortly a resolution asking the Banks committee to call hearings on the matter. ll hearings on the matter.
In the Senate hearing in 2022, BSP officials said the decision to choose polymer notes is based on the lower replacement cost and high production cost savings.
BSP Deputy Gov. Mamerto Tangonan, head of the Payments and Currency Management Sector (PCMS), back then said “using data on the actual volume of 2021 new banknote withdrawals by banks from the BSP and lifespan assumptions ranging from 2.5 times to 4 times longer than that of paper, estimated production savings amount to P1.2 –2.4 billion, holding other factors constant.”
“Higher production savings would redound to higher net profits, 50 percent of which accrues to the National Government (NG),” he told the recent Senate Committee on Banks, Financial Institutions and Currencies deliberations on polymer.
Tangonan said that at the end of the polymer circulation test which is until 2023, the BSP will come out with its findings on whether or not plastic-based banknotes present more benefits to Filipinos compared to paper-based banknotes. No such results have yet been divulged.
“(The BSP) has developed a polymer evaluation framework that consist of empirical studies to be undertaken no later than 2024 – these would help us assess objectively if the reported benefits hold under Philippine condition,” Tangonan assured politicians and the abaca industry players who were present during the Senate deliberations.
The BSP’s planned polymer evaluation framework will cover the following: carbon footprint analysis (lifecycle analysis); microbial contamination analysis; perception surveys and sentiment analysis; and banknote lifespan analysis.
Tangonan explained further that with a longer lifespan, banknote issue expenses “could be reduced by 40 percent to 60 percent per experience of other central banks.
He cited as examples the Bank of England which documented reduced production costs by 25 percent or about £100 million in savings over a ten-year period while Australia had $1 billion net savings over the past 25 years since it switched to polymer money. There are 56 countries that use polymer banknotes.
At the moment, the BSP’s printing facilities are only equipped to print paper-based banknotes. The polymer banknotes are outsourced and printed by Note Printing Australia, a subsidiary of the Reserve Bank of Australia. In printing paper-based banknotes, the BSP uses 80 percent cotton and 20 percent abaca which is a banana fiber produced in the Philippines.
Tangonan said BSP has accredited local abaca pulp suppliers Pulp Specialties Philippines Inc. and Albay Agro-Industrial Development Corp.
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