Philippines Keeps the Cash Circulating During COVID, and Saves on Costs

To ensure adequate supply of cash during the pandemic, the Bangko Sentral ng Pilipinas (BSP) outsourced 62.2% of banknotes from foreign printers in 2020, printing only 34.7% locally.

This is in contrast to what is considered ‘normal times’, when BSP prints most of the country’s banknotes requirements. In 2019, for example, it produced 65.7% of its banknotes and outsourced 34.3%.

According to the recently-published 2020 Annual Report, it delivered 3.685 billion banknotes in the year. This figure included 655 million of the enhanced New Generation Currency or eNGC banknotes, which were launched last July with improved security threads for the 100 up to 1,000 piso denominations, SPARK® Live for the 500 and 1,000 notes and tactile marks for the visually-impaired across all denominations. The 20 piso banknote, meanwhile, is transitioning to a coin, which was also launched last year.

As for coins, the BSP was able to produce most of the country’s coin requirements in 2020 - 73.8% in-house, with 26% outsourced. 1.33 billion coins were minted, including 29 million of the new 20 piso coins. The 20 piso coin and note will continue to co-circulate until the latter is removed from circulation through ‘natural attrition’.

The cost for printing and minting currency dropped by 7%, from 12.4 billion pisos to 11.6 billion pisos. At the same time, cash in circulation increased from 1.7 trillion pisos to just over 2 trillion pisos.

In terms of currency operations, the BSP was able to maintain uninterrupted supply despite the restrictions and shutdown caused by the pandemic. In Metro Manila in particular, the BSP Cash Department was able to serve 99.6% (in value terms) and 97% (in volume terms) of requirements. To ensure the continuing supply of cash when BSP operations and transportation were limited, the BSP set up the Cash Service Alliance (CSA), in partnership with the Bankers Association of the Philippines.

During the year, BSP undertook a reorganisation to combine its cash and payment departments as part of it goal to accelerate a move to a ‘cash-lite’ society, and remove some of the friction and barriers that working in different silos for each activity can create.

The cash department is responsible for printing banknotes, manages currency retirement, mints coins, manages securities documents, refines gold, prints the national ID cards and services bank deposits and withdrawals in the greater Manila area, along with anti-counterfeiting operations.

The payments department licences and supervises payment system operations and administers digital personal equity retirement accounts. It is also managing the digital payment transformation of the Philippines, which includes the E-PISO project to move the Philippines from cash to digital payments, and the work to develop a CBDC.