BSP to test polymer P1,000 banknotes in 2022

The Bangko Sentral ng Pilipinas (BSP) on Monday said it will start the testing of P1,000 polymer banknotes next year, which will have a similar material used in countries such as Australia and Canada.

In a virtual briefing, BSP Deputy Governor for Payments and Currency Management Mamerto Tangonan said the central bank plans to release “a few million” pieces of the polymer P1,000 banknote next year.

“It’s the one that is used the most by the people, and we want to see how the public will handle these new banknotes, and we want to see that it gives us a life that is at least two and a half times our existing cotton-abaca notes,” he said.

“We’re considering testing with a few hundred million pieces of banknotes. It has to be issued, it has to be circulated nationwide, it has to be used by the public so we can see how it behaves and we can test the banknote itself, and we can also get feedback on how our people, our public would handle them,” Tangonan added.

The P1,000 polymer banknotes will have a similar design to the ones already in circulation, but the material will be like the banknotes used in countries such as Australia, Canada, Mexico, New Zealand, and the United Kingdom.

The BSP is pushing for the adoption of polymer-based banknotes, as these are said to be more hygienic and sanitized, more sustainable and environmentally friendly, more durable, and more cost effective.

The polymer banknotes will also have additional security features which will make them difficult to counterfeit.

Citing the experience of other countries, Tangonan said polymer banknotes can withstand extreme temperatures and could last 2.5 to 4 times longer than paper money.

These are also water- and dirt-resistant, more conducive to wet market conditions, and could reduce production costs by 25%.

“The test will help us determine the effects of polymerization on hygiene and public health, environmental sustainability, as well as the lifespan, durability, and counterfeiting rates of our money,” the BSP said.

“It will also allow us to collect stakeholder feedback and observe changes in currency handling behavior,” it added.

The testing of the polymer banknotes is expected to start within the first six months of 2022.

“If everything goes well, we’re looking at hopefully even by next year to start the test. It may not come in a big bang, but of course we cannot print everything in one go. When we print, we issue,” Tangonan said.

The testing period could take three years, to see if the durability of the polymer banknotes could live up to 2.5 to 4 times longer than the paper money in circulation.

“The public has to get used to it. The design has to be, the material itself has changed or will change, so the transition has to be well planned,” Tangonan said.

Should the test be successful, Tangonan said it will be up to policy makers to decide whether to adopt polymer banknotes for all denominations moving forward, based on the data gathered from the test.

The polymerization program, however, has been opposed previously as these would have an impact on the local abaca industry, where the BSP sources materials for the current banknotes in circulation.

According to Tangonan, this will have a “minimal” impact on the local industry, as the test will only be for the P1,000 denomination. This would translate to 0.2% to 0.4% hit on the farming jobs, and 0.1% to 0.2% to total abaca exports.

“We are cognizant even if we say the impact is minimal, we are cognizant of it and we are appropriately finding alternative markets for the abaca fiber,” he said.

The BSP has already conducted consultations with various polymer banknote producers, and other central banks on their actual experiences with polymer banknotes. —KBK, GMA News